FedEx CEO Raj Subramaniam reveals how technological advancements and geopolitical tensions are driving a fundamental shift towards regionalised trade patterns, forcing logistics giants to innovate and diversify strategies.
FedEx CEO Raj Subramaniam recently outlined the profound and enduring shifts reshaping global trade and supply chains, emphasising that these changes are driven by technology advancements and geopolitical risks. Speaking at the Bloomberg New Economy F...
Continue Reading This Article
Enjoy this article as well as all of our content, including reports, news, tips and more.
By registering or signing into your SRM Today account, you agree to SRM Today's Terms of Use and consent to the processing of your personal information as described in our Privacy Policy.
orum in Singapore on November 20, 2025, Subramaniam highlighted the emergence of a more regionalised trade pattern that marks a new “equilibrium state” for supply chains worldwide.
According to Subramaniam, this new supply chain landscape is unlikely to revert to previous norms once the industrial economy fully adjusts, a process he noted is taking longer than expected. He suggested that the structural changes underpinning these shifts go beyond short-term political cycles and election outcomes, pointing to a fundamental transformation in how global commerce operates.
One major factor weighing on FedEx’s performance this year is the fallout from US-China trade tensions, particularly the end of an exemption on low-value goods shipments from China to the United States. Previously, many packages valued under $800 entered the US duty-free under the ‘de minimis’ exemption, but this was rescinded under former President Donald Trump’s administration in May 2025. This policy change has directly impacted FedEx’s parcel volumes, with the company reaffirming in November that it expects a $1 billion hit in 2025 linked largely to reduced shipments on the China-US route. Analysts estimate that the tariff changes alone will cost FedEx around $170 million in one quarter, representing a noticeable drag on revenue.
Interestingly, while shipments from China to the US have decreased, FedEx has observed rising trade flows from China to other regions, including Europe, Latin America, and other parts of Asia. To respond to this evolving trade geography, the company is actively redeploying its capacity and repositioning aircraft to better serve emerging routes. Subramaniam stressed FedEx’s agility in adjusting capacity faster than manufacturing supply chains can shift, allowing the company to react effectively to these market signals.
Adding context to the conversation on supply chain resilience, ABB Ltd. Chairman Peter Voser, also at the forum, noted that disruptions are no longer simply tied to political cycles but are a reflection of businesses recognising the high costs associated with supply chain interruptions. Voser pointed out that companies increasingly prefer to invest in inventory buffers to avoid the expensive fallout of disruptions.
FedEx’s strategic moves include the recent decision to spin off its less-than-truckload freight business to focus more on its core delivery operations. This move has been well received by investors, with FedEx’s shares rising and market capitalisation increasing by $5 billion. Industry analysts have suggested that this could unlock significant shareholder value, potentially up to $20 billion, by allowing the freight business to operate more efficiently as a standalone entity.
The broader US logistics environment remains unsettled due to regulatory and policy shifts. For example, the US Postal Service’s brief suspension of incoming parcels from China and Hong Kong early in 2025 added confusion for retailers and shippers navigating new tariffs and import restrictions meant to curb the flow of fentanyl into the US.
Overall, FedEx’s leadership perspective suggests that companies involved in global supply chains must prepare for a long-term, structural transformation marked by more regional trade patterns, ongoing geopolitical risks, and a greater emphasis on supply chain resilience. These changes are redefining logistics strategies and forcing major carriers like FedEx to adapt quickly to a dynamic and uncertain global trade environment.
Source: Noah Wire Services
