FedEx Remains Unfazed by Red Sea Disruptions

Impact of Red Sea Disruptions on FedEx

American courier behemoth, FedEx Corp (NYSE:FDX), recently commented that it hasn't observed any significant migration towards air freight, despite the disturbances in the Red Sea leading to a nearly fortnight-long extension in shipping transit times. "The majority of worldwide commerce, approximately 90%, depends on maritime shipping. Consequently, even minimal alterations could be consequential, but we haven't noticed any drastic changes," stated Raj Subramaniam, the CEO of FedEx, at the National Retail Conference held on Sunday.

Subramaniam, who assumed the role of CEO in June 2022, further added that air freight prices have managed to maintain their stability.

Effects of Iran-Backed Houthi Militia Attacks

Container ships in the Red Sea have been under attack by Iran-supported Houthi militants, compelling some retailers to prematurely gather goods in anticipation of China's Lunar New Year holidays. They have been exploring air or rail options for transportation instead of relying on the troubled Red Sea route in an attempt to avert potential shortages during the spring season, according to industry experts and executives who spoke to Reuters.