FedEx Corporation said that it's bracing for soft demand for shipping services to continue into 2010, warning that it may be forced to take more cost-cutting actions if the economy deteriorates next year, Dow Jones reported.
FedEx, considered an economic bellwether, noted that it has taken a number of steps this year to bring its services in line with reduced demand, including laying off some employees and grounding some older aircraft.
But the company warned that "additional actions will be necessary to reduce the size of our networks" if the economy continues to decline in 2010.”
Still, FedEx said in the outlook that it won't take any action that hurts its ability to provide high-quality service. It pegged its 2010 capital-spending budget at about $2.6 billion, although it said it will reduce the budget if conditions worsen.
FedEx said 2010 revenue will be hurt by lower yields stemming from reduced fuel surcharges and a competitive pricing environment.
It said it expects volume growth in 2010 at its FedEx Ground unit due to market-share gains, but flat volume at its premium FedEx Express unit. It forecast a drop in shipments at its less-than-truckload unit due to industry overcapacity in the segment. 10k Statement..........