FedEx CEO touts ‘scaled network’ as supply chain challenges loom

In a Thursday interview with CNBC Jim Cramer, FedEx CEO Raj Subramaniam said his company can do well even if there is a supply chain disruption.

“As supply chain models change, we’re here, there and everywhere,” he said. “This is the advantage that people sometimes miss, the fact that we have a scaled network in place, gives us an advantage in these dynamic times..”

President-elect Donald Trump has threatened to sharply increase import tariffs for many countries, especially China, and these moves could disrupt global supply chains. While Subramaniam conceded that China currently accounts for about 28% to 30% of global manufacturing, he said the good news for FedEx is that its network is global, stating that the company serves 99% of global trade .

This dynamic makes it easier for FedEx to “adapt and move our capacity around” and connect every point of the network to the rest of the world, he continued. Subramaniam also said the company is seeing better-than-expected demand this month. He said he thinks consumers are feeling more bullish and suggests December could be a record month for the Port of Los Angeles.

FedEx reported a mixed quarter on Thursday after the close and announced plans to spin off its shipping business into another publicly traded company, FedEx Freight. Shares rose more than 8% in extended trading. Subramaniam said the split could help create long-term value for shareholders of both companies.

“We’re sitting on global supply chain insights,” he said. “So we want to not only be a leading transportation network provider, but also a global supply chain technology provider.”