Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **transportation industry**, specifically the impact of **US tariffs** on freight flows from **China to the USA** [1][2][5]. Core Observations - **Laden vessels** from China to the USA decreased by **4% sequentially** and **19% year-over-year (YoY)**, indicating a softening trend that may persist through mid-August based on data from the **Port of Los Angeles** [1][5]. - The **tariff-related impacts** are still unfolding, and the upcoming weeks are critical for understanding shipper reactions as the peak season approaches [1][6]. - **Weekly data** can be volatile, but analyzing it over multiple weeks can reveal trends related to tariffs [3][9]. Freight Flow Data - **Container rates** have dropped by **8% sequentially** and are under significant pressure, down **67% YoY** [5][29]. - **Rail intermodal volumes** on the West Coast increased by **1% YoY**, marking the fifth consecutive week of positive growth, suggesting a recovery in logistics following previous disruptions [5][40]. - Planned **TEUs (Twenty-foot Equivalent Units)** into the Port of Los Angeles are expected to drop by **3%** in the near term, with a potential **20% increase** two weeks later [5][33]. Future Projections - The **2025 trade scenario** suggests that shippers may delay orders due to uncertainty, which could lead to an underwhelming peak season in terms of volume and revenue [6]. - If a **re-stock event** occurs in 2026, it could significantly benefit freight flows and margins, especially if consumer spending remains strong during the holiday season [6]. Stock Recommendations - **Transport stocks** may face downward pressure in the second half of 2025 if consumer demand does not increase [8]. - **Freight forwarders** like **EXPD** and **CHRW** are expected to benefit from volatility and potential surges in demand due to tariff pauses [8]. - **Parcel companies** such as **UPS** and **FDX** are also positioned to gain from increased demand for air freight during peak seasons [8]. Additional Insights - The **Logistics Managers Index** indicates that upstream inventories are expanding, while downstream inventories are contracting, reflecting a complex inventory landscape [69]. - The **Supply Chain Congestion Tracker** remains stable, suggesting fluidity in logistics comparable to pre-COVID levels [48][50]. - The **Big Three ports** (LA, Long Beach, Oakland) experienced a **5% YoY decline** in volumes but a **21% sequential increase** from May to June, indicating a recovery trend [52]. Conclusion - The transportation industry is navigating a challenging environment influenced by tariffs, consumer behavior, and inventory management. The upcoming months will be crucial for assessing the impact on freight flows and stock performance in the sector [1][6][8].

Core Insights - FedEx reported strong fourth-quarter fiscal 2025 results, beating both earnings and revenue estimates, but provided a dismal outlook, leading to a more than 5% drop in shares after market close [1][3] Financial Performance - Earnings per share for FedEx were $6.07, surpassing the Zacks Consensus Estimate of $5.93 and improving from $5.41 a year ago [3] - Revenues increased by 0.5% year over year to $22.2 billion, exceeding the consensus estimate of $21.7 billion [3] Future Outlook - For the first quarter of fiscal 2026, FedEx expects revenues to be flat or increase by up to 2%, with adjusted earnings per share projected between $3.40 and $4.00 [4] - The Zacks Consensus Estimate for revenues indicates a growth of 0.21%, while the estimate for earnings per share is $4.05 [4] - FedEx did not provide earnings and revenue forecasts for fiscal 2026 due to uncertainties surrounding U.S. trade policies, particularly with China [5] Cost Management - FedEx achieved its $4 billion cost-cutting goal and aims to trim an additional $1 billion in the upcoming fiscal year [5] ETF Impact - The sluggish trading is expected to affect ETFs with high allocations to FedEx, including ProShares Supply Chain Logistics ETF, iShares U.S. Transportation ETF, First Trust Nasdaq Transportation ETF, and Pacer Industrials and Logistics ETF [2] ETF Details - ProShares Supply Chain Logistics ETF holds 40 stocks, with FedEx accounting for 4.6% of assets, and has an asset base of $0.9 million [6][7] - iShares U.S. Transportation ETF includes 44 securities, with FedEx making up 4.5% of assets and has $657.1 million in AUM [8][9] - First Trust Nasdaq Transportation ETF tracks 38 transportation securities, with FedEx accounting for 3.6% of the basket and has an asset base of $28.4 million [10][11] - Pacer Industrials and Logistics ETF tracks 109 stocks, with FedEx representing 3.1% of the holdings and has accumulated $1.6 million in assets [12][13]