- FedEx filed a Form 10 on Jan. 16, 2026 to spin off FedEx Freight into a standalone, tax-free public company targeted for June 1, 2026.
- The new FedEx Freight board is set, with John A. Smith as incoming CEO and R. Brad Martin as chair alongside eight independent directors.
- FedEx Freight enters the split with weaker results as shipments and revenue soften while costs rise, pressuring margins and prompting lower outlooks.
- FedEx says the separation should unlock value by sharpening focus, improving transparency, and optimizing capital allocation for both businesses.
Read More
On January 16, 2026, FedEx Corp filed a Form 10 registration statement to spin off FedEx Freight—its less-than-truckload (LTL) business—into a standalone publicly traded company, FDXF, aiming for separation on June 1, 2026. The transaction is planned to be tax-free for FedEx and its shareholders except for cash distributed for fractional shares. This marks a major reorganization of FedEx’s structure, separating its freight operations from its parcel-focused businesses.
Leadership for the new entity is now firmly in place. John A. Smith, currently COO of U.S. & Canada FedEx operations, will become president & CEO of FedEx Freight; R. Brad Martin will serve as Chairman of the Board. The board also includes eight other directors with expertise across supply chain, logistics, finance, and technology sectors. Examples include Donald E. Frieson (formerly of Lowe’s and Walmart supply chain), Cindy J. Miller (former UPS, Stericycle), and Amy J. Salcido (technology services leadership at IBM/Kyndryl).
Financial performance for FedEx Freight heading into the spin-off shows mixed results. In FedEx’s most recent fiscal quarter, Freight segment revenue fell roughly 2% year-over-year, while operating income dropped $70 million (about -22%), with margins contracting ~300 basis points. FreightWaves reports the adjusted operating ratio deteriorated to ~88.7% (inverse of operating margin), with significant wage and hiring pressures, particularly building out a 400-person sales team. As a result, expectations for revenue growth have been revised down—showing likely modest decline for the upcoming fiscal year—while operating income is expected to fall by about $300 million y/y, a swing from earlier forecasts of modest income growth.
The spin-off is positioned as a value unlock: by separating the Freight unit, FedEx aims to sharpen management’s focus in both businesses, tailor capital investment, provide greater visibility into each business’s financials, and improve operational discipline. This is consistent with stakeholder demand for clarity, and parallels similar strategies in logistics and transportation sectors. That said, multiple external risks persist: LTL demand in the industrial economy remains soft; labor, fuel, and transportation costs are rising; shippers are resisting price increases; and execution risk looms large in setting up independent operations, systems, and culture.
Key open questions remaining include: How will FreightF’s capital structure and indebtedness be managed post-spin-off? What level of retained ownership (if any) FedEx Corp will hold, and how will initial share distribution occur? To what extent synergies (fuel, overlapping support services) will persist or be unwound? Also, will resulting market valuation discount or reward the specialized, yet volatile, nature of LTL operations?
Supporting Notes
- FedEx formally submitted its Form 10 to the SEC on January 16, 2026, for the spin-off of FedEx Freight, with separation expected on June 1, 2026; its common stock will trade under the symbol “FDXF” on NYSE.
- Leadership: John A. Smith is incoming President & CEO of FedEx Freight; R. Brad Martin will be Chairman; the board includes 10 members with cross-industry expertise.
- Freight’s financials in FedEx’s Q2 FY2026: revenue down ~2% YoY; operating income fell by about $70 million; operating margin declined by ~300 bps for Freight unit.
- Expectation revisions: revenue for FedEx Freight likely to decline slightly year-over-year; operating income expected to drop $300 million vs prior forecast for a $100 million rise; daily shipments to fall low single digits; rate increase of 5.9% effective January 5, 2026.
- Value proposition: in fiscal 2024, Freight had revenue of ~$9.4 billion, and over past 5 years grew operating profit nearly 25% annually, with ~1,100 basis points of margin expansion.
- Risks: high costs associated with spin-off, competitive pressure in LTL market, macroeconomic headwinds; analysts expressing concern profit outlook may already embed assumptions of freight rebound.