Operating as a standalone company independent from FedEx only since June 1, FedEx Freight executives held a quarterly earnings call on June 26, reporting segmented Q4 and annual earnings in its fiscal year and outlining what could be ahead for the remainder of 2026.

“As we enter this next chapter, we are shaping a new legacy, sharpening our focus on LTL, and positioning FedEx Freight for a more agile, resilient, and profitable future,” John Smith, FedEx Freight president and CEO, said on the call. “As you've heard me say before, we are just getting started.”

Highlights from fiscal 2026

Despite the operational transition, FedEx Freight drivers recorded a record-low DOT preventable accident rate for the fiscal year.

“This result is a direct reflection of the collective responsibility, professionalism, and dedication of our team across North America,” Smith said.

Q4 revenue results were strong. FedEx Freight ended its fiscal year generating $2.4 billion in revenue (a 4.8% increase from Q4 2025), $363 million in adjusted operating income (a 23.9% decrease from Q4 2025), and a 15% adjusted operating margin (compared to 20.8% in Q4 2025). Smith attributes the decrease to a softening freight volume but remains hopeful for the upcoming quarter.

“Trends have improved sequentially,” Smith said. “We're encouraged by these early signs that demand may be stabilizing for our services, supported by improving manufacturing indicators, truckload trends, and higher year-over-year contractual increases.”

Despite the lower freight volume, revenue per shipment increased 11.5% year over year, which Smith attributes to increased weight per shipment and higher fuel prices; however, Smith also mentioned an increase in backhaul efficiency enabled by a “tighter truckload capacity.”

The separation from its parent company incurred approximately $80 million in costs, primarily related to IT, system support, and increased employee headcount.

What Smith expects from FedEx Freight for the remainder of the calendar year

The successful launch of becoming a standalone company was no easy feat. Still, Smith said the success is a “direct result of months of rigorous planning, deep collaboration, and detailed coordination across [the] organization.” Even during the transition, operations ran smoothly, allowing FedEx Freight to begin its standalone venture from a strong position, according to Marshall Witt, FedEx Freight's chief financial officer.

“We are very pleased with our performance in the quarter, especially given the complexity of executing the spin and navigating a dynamic external environment,” Witt said on the call. “Despite these moving parts, we enter this next stage from a position of strength with a durable financial profile.”

Looking ahead, FedEx Freight aims to continue its strong performance. It expects a revenue growth of 4-6%, Witt said, driven mostly by “yields supported by sustained higher fuel prices,” stronger pricing execution, and focused sales efforts.

How FedEx Freight is operating as a standalone entity

Planning for FedEx Freight to become a standalone operation has led to shifts in personnel and procedures. FedEx Freight now boasts a fully staffed sales force that works with new and existing customers and frontline employees, Smith said. These sales teams are now back in FedEx Freight brick-and-mortar locations to better support customers. In some cases, these team members even join drivers on deliveries to meet customers face-to-face, according to Smith.

FedEx Freight has also worked to deepen its expertise in less-than-truckload operations through those closer relationships with customers and by implementing LTL-specific trucking technology. The technology strategy included a new freight pricing platform. Also, it included the launch of the FedEx Freight website in May, which Smith said has exceeded expectations, “with nearly half a million unique site visits and approximately 250,000 of online shipments already scheduled since launch.”

Future FedEx Freight priorities include exiting transition service agreements quickly to reduce costs, implementing artificial intelligence to increase efficiency across the organization, and continuing to modernize legacy systems.

“Our FedEx roots created a firm foundation, one built on operational excellence, a customer-focused mindset, and an unwavering focus on reliability, quality, and efficiency,” Smith said. “As I look ahead, I have great confidence in our ability to build on this strong foundation through our go-forward strategy and a team with a proven track record of execution. Our future success is anchored in a clear, disciplined approach centered on key stakeholders, our people, our customers, and our shareholders.”