FedEx Corp. plans to consolidate its operating companies into one organization, it announced Wednesday.
The logistics giant sees the move, which will bring FedEx Express, FedEx Ground, FedEx Services and other operating companies together, as one that will drive “efficiencies that will enhance the company’s ability to meet the evolving needs of customers and ultimately build a stronger, more profitable enterprise.”
The transition is expected to be fully implemented in June 2024.
The consolidation announcement is part of an initiative that FedEx
FDX,
is calling “Drive,” and the company expects the overall initiative to drive $4 billion in permanent cost reductions in fiscal 2025.
“This organizational evolution reflects how we represent ourselves in the marketplace — focused on flexibility, efficiency, and intelligence,” Chief Executive Raj Subramaniam said in a release.
FedEx noted that FedEx Freight will still offer less-than-truckload freight services as a standalone company.
Additionally, FedEx plans to boost its annual dividend by 10%, to 44 cents a share.
Shares of the company were ahead about 3% in Wednesday morning action.