Before the conversation began, David Rubenstein asked the audience three questions.
First, he wanted to know who had ever used FedEx. Almost everyone raised a hand. Then he asked who had used it during the previous week. Quite a few hands were still up. The third question was how many were satisfied with the service.
There was a pause.
Rubenstein then turned to the numbers. Since Raj Subramaniam had become CEO almost four years earlier, FedEx shares had risen by around 73% and the company’s market value by 63%.
Later, he pointed out something less favorable: during the same period, revenue had changed much less.
Subramaniam added some context. In 2019, before the pandemic, FedEx generated around $69 billion in revenue. Over the following two years it reached approximately $94 billion, then fell to $88 billion and later began growing again.
His argument was that looking only at the beginning and the end left out much of what had happened in between.
Toward the end of the conversation, Rubenstein remarked that he should have bought shares when Subramaniam took over because he would have made a substantial return.
Subramaniam replied that he would have done even better if he had bought them three months later, in September 2022.
He was then asked whether it was still a good time to buy.
“Fantastic,” he answered.
The integration of FedEx
For decades, FedEx operated through several companies under the same brand. Express had its network, Ground had its own, and Freight operated relatively independently.
At the time, it made sense.
When FedEx entered the ground parcel business, it had around 10% of the market and needed to compete with a distinct offering. Ground grew for years and eventually became an important part of the company.
Over time, keeping the operations separate began to create more problems.
Subramaniam became CEO in June 2022 and launched the integration of the networks. When asked whether there was resistance inside the company, he often says the debate was not about whether it needed to be done, but how.
The challenge was combining operations that had worked differently for years without disrupting a network that moves millions of packages every day.
At the same time, FedEx began reviewing which businesses still made sense to keep within the group.
One of them was Freight.
The less-than-truckload business, in which a single truck carries freight from several customers, operates differently from traditional parcel delivery. FedEx was already the largest U.S. operator in that segment and decided to separate it.
The spin-off was completed on June 1, 2026. FedEx Freight began trading independently in New York and joined the S&P 500.
Before the separation, it transferred around $4.1 billion in cash to FedEx.
FedEx Office illustrates another kind of transformation. The company has around 2,000 locations inherited from the acquisition of Kinko’s. As e-commerce grew, many of those stores found a use that had not originally been envisioned: handling returns from online purchases.
Data and operations
In 1978, Fred Smith said that the information about a package was as important as the package itself.
Subramaniam often returns to that phrase when talking about technology. That idea led to FedEx’s first tracking systems, initially for internal use and later for customers as well.
Today, the scale is completely different.
FedEx moves around 18 million shipments per day across roughly 220 countries and territories. It operates close to 700 aircraft and 200,000 vehicles. Each package may be scanned around twenty-five times from the moment it leaves its origin until it reaches its destination.
That operation alone generates around two petabytes of data per day.
In 2020, FedEx began organizing that information more systematically. The company started building a digital representation of its network and using the data not only to know where a shipment was, but also to anticipate what might happen to it.
By the time artificial intelligence began advancing rapidly, part of that work had already been done.
For a large customer, that can mean knowing in advance that a storm will delay certain shipments and reorganizing inventory or deliveries before the problem actually occurs.
Subramaniam also places limits on the promises of automation.
He often points out that there is still no artificial intelligence capable of carrying a package to someone’s front door.
If volume increases, people are still needed to operate the network. According to him, FedEx added 29,000 workers in the United States during the past year.
Trade has changed
Subramaniam uses the term “re-globalization” to describe the current moment.
After thirty-five years working around international trade, he says he has rarely seen so many changes happening at the same time.
The pandemic disrupted supply chains. Then came new trade policies, tariffs and tensions between countries that forced many companies to reconsider where they manufacture, where they buy and how they move their products.
Subramaniam uses a mathematical comparison to explain it.
A few years ago, he says, moving goods across a border was like solving an arithmetic problem. Today, it is more like advanced calculus.
There are more rules, more exceptions and more variables.
For FedEx, that makes operations more complicated, but it also makes services such as customs clearance more important.
A tool originally developed in India to simplify import procedures for small and medium-sized businesses was later expanded to other markets.
The situation also requires routes to change.
In the Middle East, for example, FedEx maintains operations in Dubai and Riyadh, but currently uses other carriers to move some traffic into and out of the region.
When asked about the risk of a recession, Subramaniam was more optimistic. He said he was seeing a recovery in industrial activity and an improvement in business-to-business traffic.
His view is that international trade is not disappearing. It is changing shape.
A network built over decades
Rubenstein asked whether a new competitor could emerge and do to FedEx what Fred Smith had done to the industry several decades earlier.
Subramaniam first responded with something he learned from the founder: the only constant is change.
Then he talked about infrastructure.
Building a network capable of picking up a package in one part of the world and delivering it somewhere else took more than fifty years.
It is not just aircraft and vehicles. There are also sorting hubs, technology, permits, international agreements, customs systems and hundreds of thousands of people working within the same operation.
Subramaniam often jokes that unless someone invents teleportation, all of that remains difficult to replicate.
Globally, FedEx competes primarily with UPS and DHL. Amazon has also developed an enormous logistics operation, although Subramaniam tends to distinguish it because it is primarily focused on its own retail business.
For him, FedEx works differently: the network is available to thousands of businesses and individuals that need to move products.
Wall Street also looks at another aspect of the business.
Subramaniam acknowledges that some investors were frustrated for years by FedEx’s free cash flow generation.
The explanation once again comes back to the investment required to build the network. For decades, the company had to spend on aircraft, terminals, vehicles and technology.
He now argues that much of that infrastructure is already in place and that future investments should be more incremental.
In February 2026, he presented three targets: revenue growth of around 4%, earnings growth of 14% and approximately $6 billion in free cash flow.
Sales growth is moderate.
The improvement he is seeking lies primarily in profitability and cash generation.
Aircraft and emissions
There is one problem FedEx has still not solved.
The company operates hundreds of aircraft, and aviation remains one of the hardest activities to decarbonize.
FedEx uses sustainable aviation fuel when it is available, but Subramaniam acknowledges that it is not enough.
The company therefore funded a research center at Yale University dedicated to studying natural ways of removing carbon dioxide from the atmosphere.
FedEx provided the money but did not ask for the center to carry its name.
Subramaniam describes the project as a bet on technologies that still need much further development.
The company depends on aviation for a large part of its business and knows that, for now, there is no simple solution for eliminating those emissions.
At the end of the conversation, Rubenstein told him he had a gift for him.
It was an old map of the District of Columbia.
He did not hand it to him onstage.
He said they were going to send it by FedEx.
