This Major Shipping Company Is Closing 90 Locations Nationwide
Stores are closing across the country—will your packages be affected?
Deliveries are a part of everyday life. Whether you're sending care packages to your kids in college or treating yourself to products from Amazon, we all rely on delivery services on a regular basis. Even so, reduced need has forced one major shipping company to shutter 90 stores across the country, meaning you might soon say goodbye to a brick-and-mortar location near you. Read on to find out which big-name delivery service is closing stores.
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Inflation continues to rear its ugly head.
We've all noticed an uptick in prices across the board when shopping at the grocery store, dining at restaurants, or renewing a lease. In August, The New York Times reported that prices remained high, even though we did see some relief at the gas pump. Compared with 2021, prices were 8.3 percent higher last month, the outlet reported, citing a Sept. 13 Consumer Price Index report.
Since March, federal officials have attempted to control inflation by raising interest rates. But Americans have yet to see any significant relief, per The New York Times, which might affect unemployment rates when central bankers "clamp down" on the economy even harder, taking steeper measures to control prices.
At the same time, we continue to hear about ongoing issues with the global supply chain and the shipping industry, which is still struggling amid the COVID pandemic. Now, economic woes have also slowed global package volume, and one major shipping company has been forced to take action.
This big name is downsizing.
If you rely on FedEx for your shipping needs—or even just to make copies when you need them—you may be concerned to learn that the company will be closing over 90 FedEx Office locations across the U.S. Plans were revealed in a report on the company's preliminary first quarter financial results, published on Sept. 15.
FedEx didn't provide additional details about which locations would be shuttered or when consumers can expect to see "closed" signs at their local store. In an email to Best Life, FedEx stated that they are not providing further comment at this time.
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FedEx said the global economy is at the root of the issue.
In the report, the company notes that results in the first quarter were "adversely impacted by global volume softness that accelerated in the final weeks of the quarter."
FedEx was specifically affected by "macroeconomic weakness in Asia and service challenges in Europe," which caused a revenue shortfall of nearly $500 million, per the report. For FedEx Ground, a subsidiary of FedEx, the revenue shortfall was $300 million.
"We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations," Raj Subramaniam, FedEx Corporation president and CEO, said in a statement.
These aren't the only proactive measures FedEx is taking.
Subramaniam confirmed that FedEx is remaining consistent with goals laid out earlier this year, adding that, despite performance being "disappointing," the shipping company is "aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives."
This includes reducing flight frequency, parking aircraft temporarily, closing five corporate offices, reducing operation on Sundays at several FedEx ground locations, and enacting a hiring freeze, the report states.
However, after the report was published, investors were apparently wary of the company's economic status. FedEx's stock plummeted 22 percent on Sept. 16, and UPS' stock was collateral damage, falling by 5 percent, The New York Times reported.
Complicating matters, in a Sept. 15 interview with CNBC's Jim Cramer, Subramaniam confirmed that FedEx has seen weekly declines in volume since June and "weekly numbers are not looking so good." Due to the current economic conditions, he added that a "worldwide recession" might be imminent.