In a Thursday meeting with CNBC’s Jim Cramer, FedEx CEO Raj Subramaniam said his company can do well even if there is a supply chain shakeup.
“As the distribution chain patterns change, we are here, there and everywhere,” he said. “That’s the advantage people sometimes miss, the event that we have a scaled network in place, provides us an advantage in these dynamic times.”
President-elect Donald Trump has portended to drastically hike import tariffs for several countries, especially China, and these moves would likely disorganize global supply chains. While Subramaniam conceded that China currently represents roughly 28% to 30% of epidemic manufacturing, he said the good news for FedEx is that its network is global, claiming the company serves 99% of broad commerce.
This dynamic makes it easier for FedEx to “adapt and move our capacity around” and connect any point in the network to the snooze of the world, he continued. Subramaniam also said the company is seeing better-than-expected demand this month. He said he conceive ofs consumers are feeling more bullish and suggested December could be a record month for the Los Angeles port.
FedEx come in a mixed quarter Thursday after close and announced it plans to spin off its freight business into another publicly traded concern, FedEx Freight. Shares climbed more than 8% in extended trading. Subramaniam said the split could eschew create long-term value for shareholders of both companies.
“We are sitting on global supply chain insights,” he said. “So not at most do we want to be a leading transportation network provider, but also a global supply chain technology provider.”
