FedEx (NYSE:FDX) Corp shares rose about 3% in pre-market trading Wednesday after the logistics giant announced plans to consolidate its FedEx (NYSE:FDX) Express, FedEx (NYSE:FDX) Ground, FedEx (NYSE:FDX) Services, and other operating companies, into a single organization.
FedEx said it expects the initiative 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, according to the company.
FedEx noted the new structure will help facilitate the company’s DRIVE transformation, which is expected to generate $4.0 billion of permanent cost reductions by fiscal 2025.
It added that FedEx Freight will still offer less-than-truckload freight services as a standalone company.
As well, FedEx said its board of directors has approved a 10%, or $0.44 per share, increase to its annual dividend to $5.04 per share for fiscal 2024.
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