“We’re already starting to see traction in some of these verticals. We’re also seeing new business,” Smith said. “Even though we’re four months into the hunting phase, we feel really good about the opportunity to continue the momentum that we started building these first four months.”

Another factor FedEx Freight’s leaders think will contribute to steady improvements in 2027—when the company will still be digesting various costs and investments related to becoming a standalone company—is a 6.9% general rate increase (GRI) scheduled for early January and applying to about one-third of the company’s revenues. Witt acknowledged to analysts that “the GRI doesn’t completely stick” but added that he’s optimistic the upcoming increase will have longer-lasting benefits because of FedEx Freight’s dedicated salesforce.

“Having that stickiness and ability to use that sales relationship, to allow there to be a conversation, to hold some of that yield for longer periods of time, I think is going to be a benefit and does help further aid to our confidence in the yield growth in ’27,” Witt said.

Investors will look for more evidence that yield growth is sustainable, Stifel analysts led by Bruce Chan said in an October 30 note to clients. Chan called FedEx Freight’s first earnings report “a constructive indication of what’s to come” but called out the ongoing transition costs as likely to wipe out many of the financial improvements in the near term.

“There’s a lot of work to do, and we’d like to see clearer evidence of sustained base yield improvement and cost transition cadence to get comfortable with a stronger, normalized earnings trajectory,” the Stifel team wrote.

The early verdict, however, was very positive—especially on a day when the broad market slumped on worries about the tech sector. Shares of FedEx Freight (Ticker: FDXF) jumped nearly 15% to $126 and change, their highest level in about six weeks. The company’s market capitalization is now about $18.8 billion.