FedEx Corp. announced that it completed its separation of FedEx Freight into a separate, independent business on June 1. 

The fulfillment operator first shared plans to separate FedEx Freight in December 2024. The move also coincides with the exit of FedEx chief financial officer John Dietrich. 

“The successful separation of FedEx Freight is a pivotal milestone, positioning two independent companies to lead their respective industries and create long-term value for their stockholders,” FedEx CEO Raj Subramaniam said in a press release.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC served as financial advisers for the separation.

More than 900 of North America’s Top 2000 largest online retailers use FedEx as a shipping carrier, according to Digital Commerce 360 data. Retailers that used FedEx for fulfillment reported a combined $789.51 billion in 2025 ecommerce sales.

Why FedEx spun off FedEx Freight

When FedEx first shared its plans of separating FedEx Freight, the fulfillment operator said that both companies would be better equipped to make tailored investments and allocate capital efficiently while serving two different goals.

FedEx Freight will focus on LTL (less-than-truckload) shipments between 150 and 10,000 pounds, combining multiple smaller shipments. The new company is the largest LTL carrier in the industry, with revenue of $8.7 billion in fiscal 2025.

“Today’s spin-off positions FedEx Freight to build on its market-leading scale and a customer-focused culture, and advances the next chapter for FedEx as the industrial network that helps power the global economy,” Subramaniam said in the press release.

FedEx Freight Leadership

FedEx Freight is led by president and CEO John Smith. According to his LinkedIn profile, he has worked in the LTL industry for 40 years, joining FedEx in 2000. He previously served as the CEO and president of FedEx Freight under the larger FedEx umbrella from 2018 to 2021.

“I had the responsibility of leading through the pandemic. It was a challenging time, but we grew revenue and operating income, while protecting our team members, supporting customers, and creating a stronger business in the process,” Smith wrote on LinkedIn. “Returning to this role now, I bring the lessons learned, a sharper strategic focus, and a deep appreciation for the people who make this industry run every day.”

FedEx and FedEx Freight Q3 results

In the fiscal Q3 ended Feb. 28, Subramaniam called the quarter its “most profitable yet.” Revenue increased 8.1% year over year to $24.0 billion, and net income increased to $1.35 billion.

During the same period, FedEx Freight felt the impacts of a “challenged LTL industry,” chief customer officer Brie Carere told investors. Shipments declined 6% and revenue declined 5% in the quarter, she added. Higher rates and revenue per shipment offset some of the volume decline, FedEx said. Revenue per shipment increased 1%.

Both FedEx and FedEx Freight continue to operate with a fuel surcharge for customers that updates weekly to account for extra oil expenses due to the Iran war.

FedEx Freight projected revenue for full fiscal 2026 to decrease “low single digits,” with revenue flat or declining slightly in Q4, Carere said. She attributed the outlook to continued demand weakness in the LTL industry.

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