FedEx Freight has found its next CEO and chairman as it preps for its spinoff next year.
FedEx Corp. has promoted from within to fill the CEO and president role at its less-than-truckload (LTL) division, appointing U.S. and Canada chief operating officer John Smith to the position.
R. Brad Martin, currently vice chairman of the FedEx Corp. board of directors, has agreed to serve as chairman of FedEx Freight.
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Both appointments will be effective upon completion of the previously announced separation of FedEx Freight from FedEx Corp.
Plans for the spinoff, which is expected to occur by June 2026, remain “on track,” the company said in a statement.
“I cannot think of two individuals with more knowledge of, or commitment to, the long-term success of the FedEx Freight business than John Smith and Brad Martin,” said Raj Subramaniam, president and CEO of FedEx Corp. “Together they have the track record and expertise to successfully lead this new and exciting chapter for the independent FedEx Freight company.”
Smith already leads the FedEx Freight business as part of his current role, which also involves oversight of FedEx’s U.S. and Canada ground operations. He will continue in that role until the separation.
From 2018 to 2021, Smith served as president and CEO of FedEx Freight. He has spent 25 of his 30 years working in the transportation industry with the LTL and its predecessor companies.
Smith joined FedEx in 2000, and has held roles in operations, sales, transportation, fleet maintenance and safety. Smith also serves as the treasurer on the board of the American Trucking Associations.
As for the new chairman, Martin already heads the FedEx audit and finance committee and led the board’s strategic analysis of FedEx Freight that resulted in the separation decision.
It is expected that he will remain on the FedEx Corp. board of directors while also serving as chairman of the board of the new FedEx Freight entity.
Martin previously served as chairman and CEO of Saks Incorporated for nearly 20 years until his exit in 2007. Prior to that, he served as CEO of now-defunct department store Proffitt’s, which acquired Saks in 1998.
The appointments of Smith and Martin follow the selection of Tom Connolly as FedEx Freight’s vice president of LTL sales. Connolly is tasked with expanding the new entity’s LTL sales force from 75 specialists to 300 by the time of separation.
During a Bank of America investor conference earlier this month, FedEx’s chief financial officer John Dietrich said “we’re making great progress” in building out the sales team.
Expectations of the incoming sales team remain high, particularly given FedEx Freight’s status as the largest LTL carrier in the U.S. by revenue after the spinoff is completed.
At the time of the spinoff announcement, FedEx chief customer officer Brie Carere said the separation would let the LTL better “play offense” in grabbing more volume and competing for more business.
During the company’s fourth quarter, the trucking division saw revenue decline 5 percent to $2.1 billion with operating income declining 23 percent to $261 million. The LTL provider’s performance was impacted by 5 percentage fewer average daily shipments, lower fuel surcharges and reduced weight per shipment, partially offset by higher base rates.
The decline in volumes was an improvement from the 8 percent year-over-year decline in the second quarter.
“We think it’s going to continue to moderate and be better than it was last quarter, but still probably down year over year,” said Dietrich.
Like one of FedEx Freight’s chief competitors, Old Dominion, the soon-to-be-independent LTL doesn’t see Amazon’s push into the space as a threat to its market share.
“Ninety percent of our business is B2B, which requires a pickup. They’re not in the business of picking up freight. They’re a last-mile provider,” said Carere at the BoA conference.
Carere commented on Amazon’s strategy to use excess trucking capacity so suppliers can have goods delivered to the e-commerce giant’s facilities.
“Well, then you have no ability to respond to peak,” she said. “If you’re just selling excess capacity, that is not what our customers want. I haven’t lost a customer to Amazon from an LTL perspective. That is not the conversation that our commercial teams are having.”
