FedEx to spin off freight division into separate public company

FedEx Corp. announced plans to fully separate its FedEx Freight division into a new publicly traded company, with the separation expected to be completed within 18 months.

The move aims to provide greater operational focus and tailored investment strategies for both FedEx and its less-than-truckload (LTL) freight business.

“This is the right time to pursue a separation as we respond to the unique dynamics of the LTL market,” said Raj Subramaniam, FedEx Corp. president and CEO. “Through this process, we will unlock value for our Freight business and position FedEx to create even greater value for stockholders.”

The separation, which will be structured to be tax-efficient for shareholders, will allow each company to pursue distinct growth opportunities while maintaining synergies in operations, technology, and branding.

R. Brad Martin, vice-chairman of the FedEx board, said the decision follows a comprehensive portfolio assessment. “Building upon that powerful foundation, the FedEx Corporation board is confident that a separation of FedEx Freight will drive continued growth and value creation,” he said.

FedEx Freight generated US$9.4 billion in revenue in fiscal 2024 and is the largest LTL carrier in the industry. FedEx will retain its global parcel operations, which brought in US$78.3 billion in revenue last fiscal year, and continue strategic cost-saving initiatives like DRIVE and Network 2.0.

The transaction, subject to regulatory approval, will be carried out through the capital markets. Goldman Sachs is serving as the financial advisor, with Skadden, Arps, Slate, Meagher & Flom LLP providing legal counsel.