FedEx Corporation's freight business (FDXF.US) has been spun off from FedEx Corporation (FDX.US) and began trading independently, marking the start of a new chapter in the North American less-than-truckload transportation industry.

FedEx Corporation (FedEx Corp., FDX.US) completed the spin-off of FedEx Freight Holding Company (FedEx Freight, FDXF.US) on Monday and distributed shares of the latter to shareholders. This spin-off makes FedEx Freight an independent publicly traded company focused on the less-than-truckload transportation industry in North America. Notably, the new company will become the largest LTL carrier in North America serving small and medium-sized businesses. FedEx Freight operates in the United States, Canada, Mexico, Puerto Rico, and the U.S. Virgin Islands, with approximately 355 service centers, 30,000 vehicles, and 39,000 employees. The record date for the spin-off was May 15, giving investors a few days to lock in their shares of FedEx Freight without having to wait to purchase them on the open market. FedEx Corporation CEO Raj Subramaniam said, "The successful spin-off of FedEx Freight is a key milestone for the company, as both independent companies will lead their respective industries and create long-term value for their shareholders." He added, "This spin-off allows FedEx Freight to leverage its leading market scale and customer-centric culture to embark on a new chapter, while also enabling FedEx Corporation to focus on driving its industrial network business that powers the global economy." Following the spin-off, FedEx Corporation still holds a 19.9% stake in the issued common stock of FedEx Freight. As part of the plan, FedEx Corporation intends to dispose of these shares within 24 months of the spin-off completion through transactions with FedEx Corporation creditors to repay some debt, distributing dividends to FedEx Corporation shareholders, or exchanging for issued common stock of FedEx Corporation. Bank of America Corp analyst Ken Hoexter noted that in the next 18 months, FedEx Freight's top priority is to quickly exit transitional service agreements, reduce costs, and optimize its IT roadmap; the next phase will focus on advancing AI automation upgrades. Hoexter stated that the market currently values FedEx Freight at around 25 times earnings, at a discount compared to the industry's valuation levels of 30-40 times. Susquehanna analyst Harrison Bauer and his team believe that FedEx Freight's management has a clear and practical judgment on operational performance and pricing strategy, and the company's credible path to creating long-term value supports their bullish rating on FedEx Freight following the spin-off. Morgan Stanley analyst Ravi Shanker said the next 12 months will be a critical optimization period for FedEx Freight: as customer contracts are renewed, the company will gradually optimize its independent pricing mechanism and expand profit margins using a new pricing system and a more focused LTL sales team.