FedEx blames staffing problems for drop in quarterly profits

FedEx continues to deal with the staffing problems that has increased the expenditure of the company


Shortage of labor is a problem that a number of companies are dealing with. Different strategies were implemented by entities to fill up the essential spaces, but the problems continue to persist. E-commerce and logistics giant FedEx has also blamed the drop in its quarterly profits by 7 percent due to the constrain in the labor market. The Chief operating officer Raj Subramaniam gave an instance of its distribution hub in Portland to narrate the challenges that they are facing.

The chief informed that the facility is currently operating at 65 percent which means that it is spending more to send the packages to the other hubs for delivery. Subramaniam also predicted that the problem is expected to continue through the peak of the holiday season. The chief officer also informed that nearly 6,00,000 packages are being rerouted on an everyday basis. Reports have said that the shortage of staff has added $450 million to the expenditure that also include overtime payments. It has also been reported that the supply chain has been affected and includes congested ports and lack of parts.

There are also chances that the company would make attempts to neutralize with the expenditure by increasing the shipping prices. FedEx chairman and CEO Frederick W. Smith said that they would continue to make changes in the strategies as the demand goes higher for their services. Smith added that the demand has gone up despite the impact of the coronavirus pandemic over the availability of labor and global supply chains. The CEO also said that he is proud of the team members across the globe who continue to transport the coronavirus vaccines and deliver the urgently needed supplies to the people who are affected by the natural disasters.

The pandemic saw a shortage of labor as the initial lockdown had seen a number of people switching to better paying jobs or starting their own ventures.

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