Network Profit – Infiweb Thu, 22 Jul 2021 07:52:47 +0000 en-US hourly 1 Network Profit – Infiweb 32 32 Fedex Corp (FDX) Q4 2021 Earnings Call Transcript Thu, 22 Jul 2021 07:52:43 +0000 Fedex Corp (FDX) Q4 2021 Earnings Call TranscriptImage source: The Motley Fool. Fedex Corp (NYSE:FDX) Q4 2021 Earnings Call Jun 24, 2021, 5:00 p.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good day everyone and welcome to the FedEx Corporation Fourth Quarter Fiscal Year 2021 Earnings Conference Call. Today’s call is being recorded. At this time, I will turn […]]]> Fedex Corp (FDX) Q4 2021 Earnings Call Transcript

Image source: The Motley Fool.

Fedex Corp (NYSE:FDX)
Q4 2021 Earnings Call
Jun 24, 2021, 5:00 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day everyone and welcome to the FedEx Corporation Fourth Quarter Fiscal Year 2021 Earnings Conference Call. Today’s call is being recorded.

At this time, I will turn the call over to Mickey Foster, Vice President of Investor Relations for FedEx Corporation. Please go ahead.

Mickey FosterVice President, Investor Relations

Good afternoon and welcome to FedEx Corporation’s fourth quarter earnings conference call. The fourth quarter earnings release and stat book are on our website at This call is being streamed from our website where the replay will be available for about one year.

Joining us on the call today are members of the media. During our question-and-answer session, callers will be limited to one question, in order to allow us to accommodate all those who would like to participate.

I want to remind all listeners that FedEx Corporation desires to take advantage of the Safe Harbor provisions of the Private Securities Litigation Reform Act. Certain statements in this conference call such as projections regarding future performance may be considered forward-looking statements within the meaning of the Act. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our press releases and filings with the SEC.

Please refer to the Investor Relations portion of our website at for a reconciliation of the non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures.

Joining us on the call today are Fred Smith, Chairman and CEO; Raj Subramaniam, President and COO; Mike Lenz, Executive Vice President and CFO; Mark Allen, Executive VP, General Counsel and Secretary; Rob Carter, Executive VP, FedEx Information Services and CIO; Brie Carere, Executive Vice President, Chief Marketing Officer and Communications Officer; Jill Brannon, Executive VP and Chief Sales Officer; Don Colleran, President and CEO of FedEx Express; John Smith, President and CEO of FedEx Ground; Henry Maier former President and CEO of FedEx Ground; and Lance Moll, President and CEO of FedEx Freight.

And now, Fred Smith will share his views on the quarter and year.

Frederick W. SmithChairman of the Board and Chief Executive Officer

Thank you, Mickey. Fiscal ’21 was truly unprecedented and we are enormously proud of our 570,000 team members who performed magnificently to keep global healthcare, industrial and at-homes, supply chains open and more recently allowed significant additional commerce to flow. The FedEx teams were involved in moving PPE, vaccines and international shipments has been perhaps this company’s finest hour. Our financial results speak for themselves. Raj and Mike will have more to say about the numbers of course. Our priortity in the FedEx team and our performance for shareholders has greatly tempered however, but our continuing grief over the 15th April senseless murder at FedEx Ground facility in Indianapolis of eight FedEx team members. The lingering sorrow among their families, friends and colleagues throughout FedEx can never be erased. Raj will also comment on this tragedy in a moment.

The strategies, we’ve executed over the last several years were carefully developed and have been executed to the high level with great success overall. As we mentioned previously the pandemic simply brought many of the market trends which informed our strategies forward. Brie will be more specific about these trends in a moment. As reported FedEx revenues for FY ’21 were $84 billion and we project FY ’22 revenues over $90 billion. We believe FedEx margins will continue to improve this fiscal year. However, as Raj will cover momentarily, the labor market in the US over the last several months has been quite challenging adversely affecting hiring and leading to significant reengineering of parts of our networks to deal with the lack of these resources. And while the situation has begun to abate, delivering a successful peak season, when we anticipate significant year-over-year volume increases will require additional flexibility and creativity on the part of our management, staff and frontline team members while maintaining our safety above all culture.

To handle future ground volumes, we are significantly increasing capacity to deliver both great service and improve financial results. This summer, we are intently focused on improving network and delivery operations prior to the volume surge in the fall. There is great focus on revenue and quality at FedEx, however our focus solely on yields does not give a complete picture of our profit upside. As Brie will explain our alliances with retailer partners generate significant amounts of short-haul traffic, much of which is now shipped from stores. Our innovate digitally initiatives are gaining steam particularly surround and sensor wear.

Let me thank Henry Maier, for more than 34 years of loyal and dedicated service to FedEx and RPS, which we acquired in 1998. At the conclusion of this call, I’ll have additional comments about Henry’s remarkable career and countless contributions to FedEx’s growth and success. I’ll further note the bad administration has recognized an exceptional talent in our Board member John Chris Inglis who was confirmed by the Senate last week, to serve as the National Cyber Director. We benefited from Chris’ cyber security and information technology expertise since he joined our Board in 2015 and we wish him well in the hugely important role for which he has been tapped.

Now Raj, Brie and Mike will give their remarks, after which we will answer your questions. Raj?

Rajesh SubramaniamPresident and Chief Operating Officer

Thank you, Fred, and good afternoon everyone. As Fred stated, we continue to mourn the tragic loss of eight team members killed at FedEx Ground facilities in Indianapolis on April 15. Let me take a moment to remember each team member we lost that day. Matthew R. Alexander, Samaria Blackwell, Amarjeet Johal, Jasvinder Kaur, Amarjit Sekon, Jaswinder Singh, Karli Smith and John Weisert. Our most heartful sympathies and condolences remain with the families, team members and friends of these individuals. They will forever be members of the FedEx family.

Now turning to our results. Fiscal year ’21 was a pivotal year for FedEx as we delivered incredible financial performance, including record revenue and profit in Q4 and for the full fiscal year. This is a no short measure due to the outstanding work by our global team members. Let me take this opportunity to say, thank you for the FedEx team, especially those on the front lines who are going above and beyond the call of duty in these difficult times. When I look back at fiscal year ’21, I’m proud of the role FedEx played in saving lives, helping small and medium businesses get back on their feet and keeping the globe connected.

The exceptional financial performance was driven by a robust growth strategy and focused execution on three key areas. E-commerce, operational excellence and digital innovation. Let me take a moment to highlight each strategic focus area and the progress made in Q4. Firstly, e-commerce. The acceleration of trends experienced in fiscal year ’21 highlight the importance of our ongoing strategic initiatives to win globally in e-commerce. This includes FedEx Ground seven day operations, investing in technology to optimize last mile deliveries, expanding capabilities to better handle large items, offering the first FedEx branded through the door service at FedEx Freight Direct and accelerating the expansion of our retail convenience network.

Ground’s full seven day operations, including weekend residential delivery coverage now reaches 98% of the US population on Saturdays and 95% on Sundays, give us a distinct competitive advantage. We are working very closely with customers to leverage the full flexibility of weekend operations, so they can meet the demands of e-commerce every day of the week. This is evident in the growth we saw in Ground Sunday deliveries with 56% more packages delivered on Sunday in Q4 than last year. We are also winning in e-commerce outside the United States by leveraging the strength of our global networks and the expansion of our portfolio. Brie will cover additional details in this regard shortly.

The second strategic focus area is operational excellence. Our competitive advantage in the marketplace is fueled by a relentless focus on operational excellence and customer service. While service is a hallmark of FedEx like many businesses, we are facing challenges with labor availability, which have contributed to recent service levels that do not meet our own high expectations of the quality we expect to deliver to our customers. The inability to hire team members particularly package handlers has driven wage rates higher and creates inefficiency in our networks as we use over time to cover open shifts and route volume around known constraints, just as a few examples. As such, we’re taking bold actions across the business to address service issues and prepare for sustained volume increases, including continued investments in people, capacity and technology to optimize our networks.

FedEx Ground’s strategic focus on efficiency continue to reap benefits in Q4 as seen in our ongoing improvements in density. These improvements are driven in part by both B2B and B2C volume growth as well as enhancements in the route optimization technology, which drove up the average number of stops the service providers made per hour by 3.6% versus Q4 of the previous fiscal year. Along with the revised service provider e-commerce rate structure, these efficiencies contributed to a 3% reduction in cost per stop compared to the same quarter last year. Further collaboration to improve efficiency continued across our businesses as we expanded our last mile optimization program. In addition, FedEx Freight provided approximately 70 million linehaul miles and delivered 1.75 million packages for Ground in fiscal year ’21.

Another significant opportunity in further enhancing our operational excellence is the improvement in the profitability of our international operations, which starts in Europe, with the completion of the physical integration of TNT. While the TNT integration has seen its share of setbacks, including a 2017 cyber attack and the delays due to the pandemic, we are certain of the value this combination creates for the FedEx of the future. The European restructuring announced in January 2021 is set to deliver 275 million to 350 million in benefits on an annual basis starting in fiscal 2024. The cost of the severance benefits under this program, which will be incurred through fiscal 2023 will be in the range from $300 million to $575 million in cash expenditures.

In Q4, we introduced overnight service from Europe connecting 90% of European businesses to major US markets. It’s an unparalleled next day connectivity that nobody in the marketplace matches. As you can see, we continue to enhance value for our customers, while restructuring our European business. Said simply, the upside in the profitability of our international business is tremendous.

Finally, our third strategic focus area, digital innovation. We are reimagining our digital capabilities and infrastructure in a manner that will deliver market-leading customer experiences that are simple, personal and proactive. We made great strides in fiscal 2021 as we continue to drive new value through strategic technologies, including increasing capabilities and products through Sensor based technologies like FedEx Sensor where ID and FedEx Surround which provide unmatched visibility and predictive capabilities, most notably seen during the transportation of lifesaving COVID-19 vaccines. Building of sharp runner integration and Adobe Magento extensive to enable a more open e-commerce ecosystem. And furthering development of our portfolio of services in the autonomous vehicle space as illustrated with ongoing Roxo testing in this month’s announcement of testing with Nuro.

In fiscal 2022, we will continue to deliver on our strategy on e-commerce, operational excellence and digital innovation as we execute on the following key initiatives. First, we expect to substantially increase capacity for this peak by investing in FedEx Ground’s infrastructure with the addition of 16 new automated facilities and the implementation of nearly 100 expansion projects at existing operations and key technological enhancements. Second, we will completed the air network integration in early calendar year 2022 which will bring the physical TNT network integration to a close and provides the inflection point for long-term profit improvement in Europe. Next, we are exercising existing options to purchase 20 additional 767Fs, 10 for delivery in fiscal year ’24 and 10 for delivery in fiscal year ’25, as we continue to modernize our fleet and improve service to our customers. And we finally continue to identify areas to adapt, collaborate and utilize different elements of our global network to increase efficiency and reduce cost to serve. Our networks and capabiliites reflect decades of investment, innovation and expertise that are differentiated from our competition. It’s incredibly difficult to replicate and provides a significant advantage over others in our industry.

When we knit it all back together, despite some of the cyclical factors, we remain very confident for fiscal year ’22 and beyond. The e-commerce market will continue to be a growth engine globally and if anything has become clear over the past year, it’s the contribution of our industry provides to the e-commerce value chain. We remain focused on differentiation, building customer solutions and improving revenue quality as critical long-term levers of profitable growth. In addition, the transformation efforts in Europe and US domestic will generate margin improvement opportunities. And finally, we’re just getting started on unlocking value with digital innovation. Our robust growth strategy positions FedEx to deliver superior sustainable financial returns and drive shareholder value for years to come.

With that I will turn it over to Brie.

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Thank you, Raj. Good afternoon, everyone. In a year of extraordinary challenges and change for our business, I continue to be immensely proud of the team’s ability to execute our commercial strategy, while developing solutions to help our customers grow their businesses. Before I move into fiscal year ’22, I wanted to reflect on our truly exceptional results of ’21. Fiscal year ’21 parcel volume was very strong across our portfolio of e-commerce solutions. Average daily volume grew across all our customer segments with US small and medium leading the way at 32% year-over-year growth. E-commerce also drove 28% year-over-year growth in our returns business through April, as more consumers shopped online, enrolled FedEx Delivery Manager users grew by 43% year-over-year. With this backdrop in the momentum from fiscal ’21, our fiscal ’22 outlook calls for robust growth. Enterprise growth in fiscal year ’22 will be primarily driven by US domestic e-commerce growth followed by strength in B2B and International and a focus on revenue quality.

In the United States the flourishing US domestic parcel market will continue to provide opportunity in the coming years. The US domestic parcel market is expected to surpass 107 million packages a day in calendar year ’22, with e-commerce contributing 88% of the total US market growth. Excluding Amazon volume, the US domestic parcel market is expected to be 72 million packages a day in calendar year ’22. As we look beyond calendar year ’22, we forecast that the US domestic parcel market will reach 172 million packages a day in calendar year 2026.

In fiscal year ’21 FedEx total US domestic residential package volume mix was 67% versus 62% a year ago. As we look beyond this fiscal year, we expect residential volume — volumes to grow significantly faster than commercial volumes. However, with retail inventories relative to sales at historic lows, we expect solid B2B volume growth this fiscal year. In fiscal year ’22 we will continue to execute against our revenue quality strategy. In fiscal year ’21 Q4, we increased FedEx Ground economy yield by 28% and overall US domestic residential yields by 16% year-over-year. It is important to note, when reviewing composite US domestic yields that weights and zone will decrease, putting pressure on yields as we grow in e-commerce. We are managing total network profitability. Short zone e-commerce and our FedEx Ground economies service will enable us to sweat our assets and maximize sortation capacity.

Within our pricing strategy, we continue to prioritize capacity for commercial and small and medium customer segments. To support the network of ongoing capacity constraints, we have increased our peak surcharges as of June 21 and we’ll monitor and adjust our strategy as capacity and demand warrants. We will continue to confidently renegotiate our large customer segment contracts to increase profitability. This means balancing product, day of week and lane mix at the customer level, while ensuring appropriate surcharges and rate increases cover rising labor costs. Most large customer contracts in the US are three years. Almost half of our total large segment volume had pricing agreement implementations in the past 12 months, leaving upside for fiscal year ’22.

Now turning to International. Global trade volume has surpassed pre-pandemic levels and is on course for its fastest year of growth in over a decade. Global air cargo capacity remained down 10% year-over-year as of April, mainly due to the reduction in passenger capacity. We expect air cargo capacity to remain constrained through at least the first half of calendar year ’22. Recovery will be slow, potentially episodic and a full recovery is not anticipated until 2024. We believe a favorable pricing internationally should continue through fiscal year 2022. We will continue to manage demand internationally even yield management and continuation of peak surcharges especially on TransPacific and TransAtlantic lanes. We are seeing a very good capture rate on these surcharges.

While peak surcharges played a significant role in our international performance in fiscal year ’21, it was not the majority of our revenue growth. In fiscal ’21, we improved parcel and priority mix versus freight economy, grew our small and medium customer base while penetrating e-commerce. In fact we grew e-commerce parcel volume by more than $1 billion year-over-year out of Asia and Europe. To a large extent due to its lightweight nature and limited relative linehaul capacity requirements, we were able to price e-commerce very competitively. I believe that e-commerce volume as a result is quite sticky. That being said, we continue to refine our commercial and network strategies to be prepared for when commercial capacity does come back.

Overall demand for exports from Asia have recovered to pre-COVID levels. In fiscal year ’22, our network plans include six InterContinental daily frequencies from Asia to provide more consistent, predictable capacity based on our demand forecast. This will eliminate some of the adhoc nature of our flights in fiscal year ’21. Enter European B2B volumes have recovered to pre-COVID levels, while our growth has further accelerated by significant B2C volumes on our intercontinental lanes, with reduced pandemic related uncertainty and industrial activity on the rise, we expect the overall European economy to be back to pre-pandemic levels in late calendar year ’21.

Raj covered our new European value proposition. Customers are very interested in both our New Europe to US overnight service and e-commerce product expansion. On the Europe to US lane, we have strong demand with a healthy mix of small and large businesses. We have deployed incremental capacity to serve this high yielding segment. Our e-commerce value proposition anchored by our new FedEx International Connect Plus product is very compelling. We continue to gain new customers and have a very robust sales pipeline. In summary, we had a stellar fiscal year ’21 and the strategies we have in place will help us to win what’s next in ’22 and well beyond.

With that, I’ll turn it over to Mike for his remarks.

Mike LenzExecutive Vice President and Chief Financial Officer

Thank you, Brie, and good afternoon everyone. Our fourth quarter and fiscal 2021 results reflect the tremendous momentum in our business and reinforce our growth strategy and investments across our network to grow our capabilities, improve collaboration and drive efficiency. Our full year results include over $1 billion in variable incentive compensation expense as we reward our team members for their invaluable contributions.

In the fourth quarter, FedEx continued to drive higher profitability with increased margins across the board. Consolidated revenue grew 30% year-over-year in the quarter, while adjusted operating income was up 117%, even with higher cost to support increased demand, increased variable compensation expense of $380 million and our previously announced $100 million contribution to Yale University to support our carbon neutrality goals.

Drilling down into those numbers, the rise in US parcel volume was the greatest driver of our revenue growth and through the incredibly hard work and ingenuity of our team members we took a significant portion of that revenue growth to the bottom line. Ground revenue grew 27% in the fourth quarter with operating margin increasing 310 basis points to 13.6%. Ground substantially improved margins and earned the most operating profit in their history. As our International business and e-commerce in the US continued to grow Express revenue grew 32% over Q4 last year, with adjusted operating margin up 340 basis points. Freight grew out this quarter with 38% revenue growth and their highest quarterly operating margin ever at 16.1%. They also topped $1 billion in operating income for the full year for the first time. With our overall profit growth, we generated a record $4.6 billion in adjusted free cash flow while balancing continued investment in the business, funding our pension plans by $300 million and strengthening our balance sheet.

During the fourth quarter, we executed a debt refinancing and extinguishment transaction underscoring our focus on reducing our financial leverage. In the fourth quarter, we reduced our outstanding debt by $2.6 billion or 11% of the total outstanding liability, eliminating all debt maturities through FY ’25 and one in FY ’27. This transaction resulted in $393 million charge in Q4, however, it will lower our interest cost over the next three years with a positive payback on the transaction.

In FY ’22, we will continue to drive a robust growth strategy capitalizing on global economic recovery and e-commerce. This focus will flex all levers of our business, including volume growth, yield management, operational efficiency and network optimization. The FY ’22 adjusted EPS range we provided corresponds 13% to 18% year-over-year growth on top of record FY ’21 earnings. I’d make the following highlights behind that. We expect margins in all our transportation segments on an adjusted basis to exceed FY ’21 levels driven by several key areas. We expect e-commerce to continue to drive higher profitability and we will continue to invest in our FedEx Ground network to improve efficiency and utilization through expanded in new facilities as well as technology enhancements.

We also look forward to incremental benefit from the completion of our physical integration of TNT, which will enable us to offer more and better services to our customers internationally. This key milestone will continue to drive momentum and provide a launch point for even better profitability down the road. Integration expenses will be lower FY ’22 than in FY ’21 and total integration spending is expected to be $1.8 billion, slightly higher than our previous estimate due to additional opportunities identified to further optimize legal entity structures and improve back office automation.

We expect continued improvement at FedEx Freight through our ongoing revenue quality and profitable growth strategies. Our outlook includes substantial funding of our incentive compensation program for our team members. That said variable compensation expense is not expected to be a headwind for fiscal ’22. While we have clear growth opportunities, the widespread labor shortages impacting many companies and industries across the US is also impacting us through higher wage rates and lower productivity, particularly in the first quarter and this is reflected in our overall outlook for the year.

Earlier Raj talked about our innovate digitally initiative. The spending related to these important projects is included in our outlook and will largely be recorded in the corporate eliminations and other section of our P&L. Further, we estimate a higher effective tax rate for fiscal ’22 of approximately 24% prior to the mark-to-market retirement plan accounting adjustments.

Finally, address — I will address our capital allocation, starting with capital expenditures, which is expected to be $7.2 billion in FY ’22. This projects to 8% or less of revenue which is the target level for the capex to revenue component of our FY ’22 to ’24 long-term incentive plan and remains below our historical capital intensity. Approximately half of our expected capital spending this year will be for growth, but the remainder for important projects like replacement of our aging FedEx Express aircraft, which not only is expected to have a high financial return but is an important part of our strategy to reduce our carbon footprint. We will also continue to invest in the modernization of our key Express hubs and upgrades to other facilities in all our transfer net — patient networks to drive efficiency. We will increase replacement of vehicles across the enterprise, which we largely deferred in FY ’21. We will add safer, more energy efficient equipment, all of these projects will yield benefits in the near term and long term.

We ended fiscal 2021 with $7.1 billion in cash and as such our leadership team is laser-focused on enhanced capital allocation opportunities, including our 15% dividend increase for fiscal ’22, which raised the dividend to $3.00 per share as we announced on June 14. Next, our plan to restart our stock buyback program during the first quarter, which we can do without having to increase leverage and our focus primarily to offset dilutive effects of our equity compensation program. And our plan to voluntarily contribute $500 million in FY ’22 to our pension plan, which was funded at 95% on May 31.

In closing, we are adding shareholder value by driving profitable revenue growth, expanding margins, generating strong free cash flow, focusing capital spending into the greatest areas return, strengthening our balance sheet and improving cash return to shareholders. Based on record fourth quarter results we just covered and the future ready strategies we have in place, I can say with confidence that we fully expect FedEx to continue delivering sustainable and superior financial returns in the future.

Next, we will be happy to address your questions.

Questions and Answers:


[Operator Instructions] And first we’ll go to Brian Ossenbeck from JPMorgan. Your line is open.

Brian OssenbeckJPMorgan — Analyst

Hey, good afternoon and thank you for taking the question. Mike wanted to see if you could give some color as relates to the Ground margins. In the guidance obviously some considerable operating leverage here in terms of incrementals, over here you’ve talked about the right store at the right package, the right truck, but clearly there is some inflation working its way through the system. So can we think about double-digits on the way to teens or would you guide us to something little bit less than that considering what you are outlining on [Indecipherable] seem to be a little bit front end loaded. So maybe if you can address that and also about the surcharges that you might be able to install to offset some of those costs? Thank you.

Mike LenzExecutive Vice President and Chief Financial Officer

Well, Brian, I’ll kind of hit the first part and just reiterate a few things we’ve said and maybe try to tie it together in a different way. But as we said the pandemic accelerated the dramatic and rapid shift in the growth of e-commerce and at the same time, as you noted there, put some pressure in areas along the way as well, which is really why the performance at Ground in ’21 has been nothing short of stellar. ATV increased an astounding 23% driven by e-commerce and we still improve margins. So Brie highlighted that US domestic parcel growth will continue to be the primary — primarily driven by e-commerce and we’re very confident in our strategy to profitability execute against that. So we expect margins to improve in ’22 and beyond as we continue to increase density, further improve the facility and on-road productivity, enhance the utilization of our assets and I kind of emphasize those aspects as Ground is generating exceptional ROIC margins and so we remain very confident of the future opportunity and we’ll continue to innovate and differentiate the capabilities there. And there was something about surcharges did you ask as well, maybe you can clarify that.

Brian OssenbeckJPMorgan — Analyst

Yes. Earlier this week we saw, I mean competitor announced some surcharges for peak season that were instituted earlier than last year and they are also a bit higher. So with the inflation you’re talking about with the capacity in the system, maybe you can address that as well and what you’ve assumed in this guidance here?

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Thanks, Brian. It’s Brie speaking from a structural pricing perspective, we believe that peak surcharges are kind of the new normal, and that we have to align our pricing to our costs. I think I’ve covered that in previous calls that we do anticipate every peak that there will be e-commerce surcharges, as we, right now we already have peak surcharges in market and we continue to evaluate changes that we need to make based on demand and capacity. We implemented some changes on June 11 and we continue to monitor the environment.


And next we’ll go to Bascome Majors from Susquehanna. Your line is open.

Bascome MajorsSusquehanna — Analyst

Yes, good afternoon and thanks for taking my questions. It’s pretty clear that we are in one of the best trade up scenarios we’ve seen from logistics customers with — of your higher yielding higher priority products doing exceptionally well in this environment. Can you talk a little bit about — more about how you protect that profitability from both mix and pricing whenever the inevitable partial being reversion to a more stable and sustainable demand and priorities environment comes?

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Sure happy to take the question. I think we have to separate it between the domestic market and the international market. Here in the US, you heard me quote some just outstanding growth numbers from a parcel perspective. So we think we actually have quite a sustained growth environment where demand will outpace capacity in the domestic market. Structurally, as I mentioned, we will continue to use surcharges, not only for peak, but to cover large package and to really just make sure that our pricing quite frankly aligns to our costs. We think we have the very best value proposition in the market. We have the best we can in coverage. And so as a result, we think the demand that we are planning for it will be there for quite some time here domestically.

On the international side, it is a little bit of a different story and far more complex. We do believe as I mentioned that commercial capacity will come back episodically it will not be a straight line up and we actually have — we believe until 2024, the longer it takes for commercial capacity to come back quite frankly the longer we have to make sure that this customer base is sticky. I pointed out in my opening remarks that we had a $1 billion growth in e-commerce. We priced this e-commerce volume at future price. It is going to be very sticky. It was very competitively priced. So we don’t believe there’s any risk there and our small business growth. We’ve also had internationally. We also believe that volume is very sticky. So as commercial capacity comes back, we’ll adjust the network, we will bend the cost curve to offset some of the surcharge risk, but overall we feel quite good about the strategies and we have some time to implement them.


And next we’ll go to Helane Becker from Cowen. Your line is open.

Helane BeckerCowen & Company — Analyst

Thanks very much, operator. Hi, everybody. Thank you for the time. I have two questions. My first question is, given the labor shortages that we’re seeing and the expectation that it’s likely to continue, is it a good time to pivot aggressively into more use of more robotics and accelerate the implementation of automation and so on.

Mike LenzExecutive Vice President and Chief Financial Officer

Well, Helane, this is Mike, I’ll just highlight that within that capex projection, a good amount of that is to enhance the efficiency of the facilities, which is what exactly aspect you’re hitting on. I’ll give it to Raj to talk more broadly about the broader point you raised.

Rajesh SubramaniamPresident and Chief Operating Officer

Well, I think the point that I want to make here is that the labor environment remains challenged right now and we are doing everything we can possibly do whether it is from wages from technology from routing and all things associated with it to make sure that we can get our service improved. We expect that over the next two, three months that situation gets better and that we get ready for peak and of course we are considering longer term opportunities that Mike talked about in terms of technology as well. Thank you.


And next we’ll go to Ravi Shanker from Morgan Stanley. Your line is open.

Ravi ShankerMorgan Stanley — Analyst

Thanks. For me one. Can you give us a little bit of color on what the two halves of fiscal ’22 look like, first half versus second half given that you probably have a little bit, I would say pandemic conditions continuing through the next couple of quarters, but then some of the comps start getting a little bit harder in the back half of the fiscal year?

Mike LenzExecutive Vice President and Chief Financial Officer

Yes. Ravi look we’re giving our best middle of the fairway estimate what we think the year looks like as you highlight there is any number of moving parts. So I don’t want to try and parse various elements along the way there, but certainly the recognition that the first quarter here with the labor challenges and productivity impacts as well as, keep in mind, we are continuing to still have to make accommodations in the Express Air network as well for labor requirements in that. So there is a number of related aspects there. So I’ll leave it at that in terms of what’s in play here.


And next we’ll go to David Vernon from Bernstein. Your line is open.

David VernonBernstein — Analyst

Hey, good afternoon, everyone. So, Mike, maybe just a follow-up a little bit on that. Is there a way to dimension in terms, or in an overall sort of like cost impacts that both the productivity and the wage impact from the inflation that you’re seeing in the marketplace can be difficulty in getting sortation kind of labor into the network. I’m just trying to ask — anything you can give us that will help us to further kind of dimension how big of a headwind that would be? Would be extremely helpful.

Frederick W. SmithChairman of the Board and Chief Executive Officer

Well, I wish we could break it down into the simple buckets. But when to amplify what Raj mentioned earlier when you don’t have the people as many people as you would optimally staff the facility with then of course your throughput is lower, and then maybe you’re not getting the density within trailers of that you might otherwise expect, so then you’re getting incremental costs there in terms of running the network, the linehaul in that. So it is not as simple as saying OK, we’re at edge short and that that’s impacting us this way and wage rate is y percent of it. It’s is a iterative ongoing exercise we have to adapt, adjust and configure around that. So that’s how we’re managing it.


And next we’ll go to David Campbell from Thompson Davis and Company. Your line is open.

David CampbellThompson Davis and Company — Analyst

Yes, thanks for taking my question. I was just curious, hey, you know you [Indecipherable] LTM division Canadian company, few months ago. Is that expected to have any impact on your marketing or your shares and market in the LTM business?

Mike LenzExecutive Vice President and Chief Financial Officer

Well, David first, this is Mike. Let me just say our commitment and value of our freight business given the results that I just spoke to is absolute. So I’ll let Brie address what we think how the market evolves going forward.

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Well honestly, this doesn’t impact our Freight strategy. We are the market share leader, because we have the best value proposition, we have had just a stellar year with the Freight team, they have done a tremendous job managing despite the tumultuous year we have, and while they did that they introduced a new product that is growing rapidly and in addition to growing our share with small customer, we intend to grow our share with the — across the threshold FedEx Freight Direct product and grow our residential share. So we are tremendously excited about our FedEx Freight division and we’re going to just stay the course.


And next we’ll go to Scott Schneeberger from Oppenheimer. Your line is open.

Scott SchneebergerOppenheimer — Analyst

Thanks very much. On the labor topic and also the first time to Freight as well, like you mentioned that it’s — it looks like it’s largely affecting first quarter. You mentioned you adjusted the guidance for the first quarter. I’m curious on your confidence of I think much of the country is hopeful that this labor dynamic and at the end of the summer. But just curious how conservative you were, or maybe a little bit more color about how you’re considering it, and if you hope you get hold by say end of first quarter. And then the follow-up question but thematically the same is in Freight you had some customer suspension and it looks like that’s largely alleviated. But could you put a little bit more color on what occurred and your comfort that that’s back in a good situation? Thank you.

Mike LenzExecutive Vice President and Chief Financial Officer

Okay. Scott. I’ll take a swing at the first part and then I’ll give it to Lance, our CEO of Freight for the second part. I mean, look, it’s not unique phenomenon that we’re experiencing. It’s the, all the aspects we highlighted. It certainly, it obviously impacts the first quarter, the most in the general expectations that everyone has that this will mitigate as we moved into the fall and the markets returned to more normalized conditions. So look, we’re at it every day, but there is no unique consideration there beyond just you see a lot of people suggesting that come September-October. Maybe that will have a more expanded workforce. Lance?

Lance D. MollPresident and Chief Executive Officer, FedEx Freight

Thanks, Mike. Well, since Freight hardly ever gets any questions. I want to take this opportunity to add brief comments and recognize our team for an exceptional year. They successfully battled through what has been the most challenging year, I’ve ever seen in my almost 30 years in this business and I grew up in it. So I want to recognize all of the points they put on the board. Now, I’m sure you all have read the multiple articles written over the last several months about the tightening in the trucking industry and it starts with the truckload sector. They are 5 times the size of the LTL divisions and when they get full the spillover comes into LTL. We has the largest LTL carrier, get the majority of it. And so when you have it combined with what the broad actions our competitors have taken to embargo entire sections of the country, without any notice impacting all customers, we decided to take an implemented temporary targeted volume and to minimize the network disruptions and balanced capacity that were at the backlogs across the entire country. So with record growth has come some tough but necessary decisions to protect our employees, reduce our backlogs and staff to our business volume. This continues to be the driving force behind our business decisions.

Now, in hindsight, I would not have wanted to make a decision back in the corner like this and we’re taking measures to avoid it going forward. I hope that provided the transparency.


And next we’ll go to Tom Wadewitz from UBS. Your line is open.

Tom WadewitzUBS — Analyst

Yes, good afternoon. Brie you commented — you provided some comments on pretty optimistic view on tightness in the domestic market. I think the sense that tightness is going to continue. How do we think about the approach to pricing? I mean, I know you’ve had tremendous momentum in pricing I think was at 14% rise in revenue per piece in Ground? How do you think about the pricing dynamic, the next couple of years? Would we expect continued kind of stronger than normal pricing gains in Express and Ground? And is it fair to view that as a pretty important driver of margin expansion that you would expect to continue, as we look at the domestic package businesses?

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Absolutely. As we look at ’22 and ’23, we absolutely think that you’re going to see a greater than our historical average from a year-over-year price increase. As I mentioned this past year, when we look at our domestic volume, we repriced about 45% of our large customer segment, and quite frankly, we actually did most of that in the back half of this year. So we’re going to have some lapping. You’re going to get benefits of those renegotiations in the back half of this fiscal year. We’re going to get them in the front half of ’22. In addition, we still have to reprice the rest of the large customer segment. And really importantly as Fred mentioned, it’s not just about the topline yield, it’s about really making sure that our price matches our cost, and we’re getting very, very focused on that, very disciplined, making sure that customers that have large package, they have the right surcharges, the right structure there, those that have the highest peaking factor, really pay for the incremental labor at peak. And so it’s not just about the top line, which I am — I want to be clear, I’m optimistic about, but it’s really about aligning our price strategy with our cost. And we do think that that is going to have tremendous momentum next year. And quite frankly, the year after, as well.


And next we’ll go to Chris Wetherbee from Citi. Your line is open.

Chris WetherbeeCitigroup — Analyst

Many thanks. Maybe just to follow up on that point. So you know, with the tightness in the market and it seemed — maybe you can correct me if I’m wrong, it seems that you and your major competitor are the biggest influences on capacity in the market. And if you can sort of meter that capacity out over the course of the next couple of years, it should set and it should support sort of a relatively robust pricing environment, certainly above cost inflation, as you go out into the outyears. So I guess, what would sort of take away from that potential opportunity, bring those domestic margins back up to maybe where we had seen in a couple of years ago? Is there some other impediment that we’re thinking about, or I guess really just a dynamic of trying to match capacity with the volume growth that you outlined, that is fairly robust, maintaining this very, very good pricing environment in the foreseeable future?

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Go ahead.

Frederick W. SmithChairman of the Board and Chief Executive Officer

Yeah, Chris. Let me just highlight one aspect, when we talk about capacity too. The capex growth at Ground is focused on smaller units than kind of going back to historical legacy large hubs. We have one opening, but it’s in — it’s targeted to efficiently and effectively execute on a lot of this growing shorter zone demand. And so that’s why, when we talk about having the right targeted investments to align the costs with where demand is going, that’s how we’re thinking about it. And then of course, it has to be matched on the pricing side, which as Brie has covered, I think pretty comprehensively. So again, it’s an integrated planning process and assessment here. Look the finance team is part of the discussions and assessments that go on in that as well. So it’s very integrated with operations, finance, sales, pricing and marketing. So the team really has a collective focus.


And next, we’ll go to Jack Atkins from Stephens. Your line is open.

Jack AtkinsStephens — Analyst

Okay, great. Thank you. Maybe a longer-term question for either Raj or Mike. But in the past, we found a very high correlation between return on invested capital and the stock’s valuation multiple within the transportation sector. And at Analyst Day earlier this month, UPS laid out a plan to get its return on invested capital, up to 26%, 29% versus about 20% today. Your LTM return on invested capital is between 7% and 8%. So Mike, what do you think is a realistic target for ROIC for FedEx, when you look out over the next three years?

Frederick W. SmithChairman of the Board and Chief Executive Officer

Jack, I’m not going to go put out any sort of targets or guidance beyond what we’ve gone with today. But I will reiterate that the investments that we’re making, we’re highly confident will generate a high return on invested capital. And I alluded to the fact that we continue to expect to see margins grow in all the business segments. So that’s what we have to do, to continue to get that to where we want to keep seeing — the trajectory. So I think that’s where we’ll leave that one.


And next we’ll go to Amit Mehrotra from Deutsche Bank. Your line is open.

Amit MehrotraDeutsche Bank — Analyst

Hi guys. Sorry about that. That goes on mute. Thanks for taking my question. Brie, I just want to see if you could talk about the recontracting process for enterprise customers? I know you mentioned they come up every three years. Does the company have an ability to kind of change pricing intra-period, with 60 or 90 days notice, or is this just really the end of the contract period? And then separately, Henry, can you just share — I don’t know, sorry if I missed it, but just the B2B and B2C mix, where B2B is today, relative to where it was pre-COVID. Just to give us some runway on some of the density benefits you’ll get, as B2B continues to recover. Thank you.

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Hi Amit. It’s Brie. So from a an enterprise contract perspective, each contract is very nuanced. We have opened some contracts out of cycle, when the customer has looked for increased demand. And so of course when they want to do something different than what has kind of been our historical average with them of course, we are going to have those conversations. I think it’s really important, yes. We want to grow our price, yes. We want to grow our yield. But we also want to have really happy, satisfied customers. And so we’re trying to strike that right balance. And so some customers, yes they do require changes in their portfolio, a change in mix to meet their business needs, because many of them saw explosive growth, especially in our retail segment, and of course and our healthcare. So of course as required, we do — we open accounts, and have those conversations every Thursday morning. As Mike mentioned, Mike, and Joe and I get together, and we review what’s necessary to run the business. So I’m very pleased that the team has been incredibly agile.

I think the second half of the question was about B2B and B2C. So I think the answer from a domestic perspective is, we are going to continue to make Express more Express. We’re going to lean into commercial. We’re going to lean into premium. And healthcare, we’re very optimistic about our last mile optimization strategy, which will allow us to continue to put some residential business into the Ground network. When we, and I guess — the other thing that I can share is that if you look in May of this past year, it was our highest absolute commercial volume in the domestic network since September ’19. So we’re very confident about the return of our commercial business here in the United States.

However, as I mentioned, 90% of the market growth will be e-commerce, and so there will be no settling of the B2C volume within the Ground network. We’re going to continue to drive that growth. We’re going to lean into it, grow yield, and as Mike has mentioned, our goal is to grow the margin while we do that. So very-very — quite frankly, excited to lean into the e-commerce growth for FedEx Ground.

Mike LenzExecutive Vice President and Chief Financial Officer

This is Mike. I should add one thing, for those of you that are asking about the sequencing or trajectory through the year. Just as a reminder, I mentioned that we accrued $380 million of variable compensation expense in Q4. And so if you add up the prior Qs in that, that gets you to $1 billion or so for the year. So Q1, we were not accruing as much last year, understandably amid the uncertainty. So just kind of keep that in mind, as you think about modeling through.


And next, we’ll go to Ken Hoexter from Bank of America. Your line is open.

Ken HoexterBank of America — Analyst

Hey, great. Good afternoon. So in the outlook, you talked a lot about Ground, but what about Express. So if we normalize for the $100 million donation to rebound of FedEx Europe with the TNT integration, the aircraft efficiency, what’s the timeframe to get back to double-digit at Express? Maybe detail the progress at TNT as well? And then just an update within that — the blending of Express into the Ground network, both on the package and facility side?

Frederick W. SmithChairman of the Board and Chief Executive Officer

Well there has been a number of milestones on the TNT. We had the road network. We completed that milestone, and that helped facilitate the enhanced commercial proposition that was highlighted. And again the air network is another key enhancement and that comes for the end of this fiscal year. So there is value coming this year. More to come and as we highlighted, with the business realignment, that hit full stride into ’24. So it’s a multiple year of significant opportunity increases there.

Rajesh SubramaniamPresident and Chief Operating Officer

Yeah Ken, let me just add that, we are very excited about where we sit with TNT. The combination of the physical integration this year, this fiscal year and next calendar year is an inflection point like I talked about. And at the same time, we are also improving — continue to improve our value proposition. The one I just talked to you about overnight service from several markets in Europe to U.S. is unmatched. So we continue to make great progress and we really think that we should see greater margin expansion, beginning in fiscal ’22 and building into FY ’23.


And next we’ll go to Allison Landry from Credit Suisse. Your line is open.

Allison LandryCredit Suisse — Analyst

Thanks, good afternoon. So Raj, you talked about lower cost per stop at Ground. So it’s only to parse out how much of that was driven by the increased B2B mix versus increased density and e-comm residential volume related to last mile optimization, and improved asset utilization from the seven day operations. And then if you could just maybe address, how we might be able to engage the improvement in cost per stop in fiscal ’22? Thank you.

Rajesh SubramaniamPresident and Chief Operating Officer

Allison, I’m going to have John answer that question.

John A. SmithPresident and Chief Executive Officer FedEx Ground

Allison, thanks for the question. If you go back when we talk about the LMO, FY ’20 we only delivered 1.2 million packages of LMO. Through fiscal year ’21, we delivered 21.6 million packages of LMO, and that’s one factor that’s improving our optimization. The next if you remember, we integrated SmartPost, which is now our economy product and plus the surging residential growth since the pandemic, and all these factors has helped us improve our residential density.

Now one of the things to remember, we’re seeing package matching, where we have commercial, residential economy or LMO packages, where they are destined to the same address or nearby address for another Ground package and we fully expect this to continue to increase. And we’re also confident that our weekend residential delivery coverage, which as already mentioned, reaching 98% of the U.S. population on Saturdays and 95% on Sundays, truly gives us a distinct competitive advantage.


And next, we’ll go to Allison Poliniak from Wells Fargo. Your line is open.

Allison PoliniakWells Fargo — Analyst

Hi, good evening. One of the issue that we have had at the manufacturing side, is really the supply chain constraints and sort of the impact that maybe those increased volumes have had. Is it something that has been, I guess one noticeable to you, and is it starting to beat or is it still sort of a level of volume that you would continue to expect, particularly on the Express side, as we move through the rest of the balance of the year here?

Rajesh SubramaniamPresident and Chief Operating Officer

The supply chain constraints are of course real. The other thing to keep in mind here is the inventory to sales ratio, it’s at an all-time low. And so we do fully expect that as the — especially as the supply chain starts to get organized here and the — we still have opportunity to grow, because — especially in the Express side of the business, as the inventory sales ratio still remains very, very low and that drives a lot of Express traffic. I hope that answers the questions, if not, just ask again what was not clear.

Allison PoliniakWells Fargo — Analyst

So the Express part of it. Like, is it starting to normalize somewhat, where you’re seeing that sort of fall off here, and obviously the inventory to sales ratio might not be as sort of next day just in time, based on some of the issues we’ve had over the past few months? Just sort of — if that was noticeable and sort of the volumes that you were seeing at this point?

Rajesh SubramaniamPresident and Chief Operating Officer

Don, you want to take that?

Donald F. ColleranPresident and Chief Executive Officer FedEx Express

Sure. The intensity of the demand has not abated and it’s driven by the factors that you and Raj both mentioned. One, on the inventory side, not only is it finished product, but its raw materials, i.e. chips and other things that are going in, into finished products. So it remains at historically low levels. The demand also hasn’t abated and so the demand cycle that we’re seeing both domestically and internationally continues to be extremely strong, and then the combination of supply being light, both in the air — in the ocean, that has trickle down and trickle-up effect, certainly factors that have us remaining optimistic, that there is no short-term change in what we’re seeing. As a matter of fact, I’m seeing an intensification of that in our international business.


And our next question comes from Bruce Chan from Stifel. Your line is open.

Bruce ChanStifel — Analyst

Great, thank you operator, and good evening team. It’s nice to be back in the mix here. Brie I want to go back to the pricing discussion for a moment, but maybe more specific to Europe. It seems like a meaningful commercial opportunity for you over there, but some of your competitors are also looking at expanding in that region as well. So my question is, are you seeing any signs of a land grab or any competitive pricing pressure develop on that front? Or are you seeing the same sort of structural differentials between demand and capacity, as you’re seeing here in the U.S.?

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Great question. And no, from a European perspective, we’re kind of the underdog. We actually see and I’ve had tremendous momentum, as I mentioned the $1 billion growth from an e-commerce perspective between Europe and Asia, and that’s intercontinental. So when we look at the Europe business, Raj mentioned, number one, we now have — we already had, but we even strengthened it further, we have the best coverage across Europe into the United States from a commercial perspective and the sales team is really excited about that value proposition. So we have upside potential on both the B2B and B2C market share into the United States from Europe.

From an intra-Europe perspective, we are predominantly focused on B2B. We’re just getting going on B2C, but we see upward potential there, and we actually also are seeing improving yields in the inter-European theater [Phonetic]. So from an intra-Europe perspective, we’re feeling optimistic. And then from an Asia to Europe, that’s our third focus area for the European team. We have historically been under shared in that lane. We have seen a tremendous relationship between our Asia and our European team. Actually our Asia team has taken share from DHL over the last four quarters. So we’re pretty pleased with them. We see a great pricing environment, and we see some really strong momentum.

Rajesh SubramaniamPresident and Chief Operating Officer

And Bruce, if I can just add, in some ways the European markets are the late boomers of post COVID-19. But we now expect them to be back to pre-pandemic levels this calendar year versus what we thought will come in next one. So there is going to be the demand, especially B2B coming back sooner and again, I think we are in a very good position for that.


And next, we have Duane Pfennigwerth from Evercore ISI. Your line is open.

Duane PfennigwerthEvercore ISI — Analyst

Hey thanks. Thanks for squeezing me in here. On the Ground Facility investments, as you tilt to smaller facilities, which you talked about being driven by ship from store, where the demand is headed. Can you talk about utilization of your existing assets? What does churn look like in those, and how often do you exit a facility, and is there any geographic focus to your Ground investments?

John A. SmithPresident and Chief Executive Officer FedEx Ground

Thanks Duane, it’s John. First of all, we’ve already talked about this, but let me remention the brick and mortar that we’re adding. We are adding a very large hub in Chino, California, and we’ll end up with 16 regional sortation facilities this year, as well as four new automated stations. Already been mentioned, that we’re expanding over 100 of our existing facilities. But that’s not just how we’re attacking our capacity. We’re also expanding our operational solutions that maximize how and when we’re using these existing buildings. For instance like, when we run multiple preloads in an existing building. Also technology is a huge play for us here, and it’s going to provide solutions that are critical to enable these solutions to work. And in addition, we’re refining tools that use real-time data, to help us streamline multiple aspects of our operation, all the way from staffing through package routing to trailer, as well as mode optimization.

And we’re also collaborating with our customers on solutions that will leverage the full flexibility of our seven day operations, and benefit from our expanded regional and local solutions for e-commerce shippers, that will allow them to reach their customers both quickly as well as cost effectively.

Rajesh SubramaniamPresident and Chief Operating Officer

And Duane, if I can answer the strategic point here, I have long talks about how we work strategically with some of the retail customers as they see their online growth. And again, that’s exactly what we’re doing in this, when you see stories of retailers showing tremendous online growth, you can bet, there is a FedEx story right behind that.


And our next question comes from Jordan Alliger with Goldman Sachs. Your line is open.

Jordan AlligerGoldman Sachs — Analyst

Yeah, hi. Given the investments you’re making in Ground and the automation facilities and preparing for a strong peak. Is there — can you give some sense against obviously what’s difficult year-over-year comparisons? What sort of big picture volume outlook might be looking at, in terms of growth perspective? Is it a mid single-digit type of number or better? Just curious. Thanks.

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Well, we’re expecting a pretty robust peak. I think last year, we called it the Shipathon. I think we’re looking forward to another Shipathon quite frankly. So, especially in the Ground network, we are absolutely expecting a robust peak and volume growth. I think Fred mentioned in his opening remarks, the goal is over $90 billion for the year, and I’m looking across the table at Jill, my commercial partner, and we’re pretty confident in that number.


And I’ll turn it back to you for closing remarks.

Frederick W. SmithChairman of the Board and Chief Executive Officer

Thank you very much for participating on this analyst call. As I said, I’d like to take a moment to personally thank Henry Maier, for his dedicated service to this organization. Henry’s various roles were pivotal at key points, from the time we bought RPS, until today. I think even Henry and I would be amazed, looking back in time, if we thought FedEx Ground was going to be the enormous entity it is today. With substantial growth prospects and an awful lot of that, Henry, it is due to your leadership and insights, you’re a remarkable professional in an area, which is very arcane and very poorly understood, and in many, many quarters because of the topology of networks and how they actually operate and had a lot of fun, just on a personal basis with our repartee and I’m going to continue that with you, as we talked about the other day. So, all of us wish you and Diane great success and retirement, and on behalf of all of us, well done, and we are deeply grateful to you.

So let me end with one administrative announcement in reviewing the format of these calls. We made the decision going forward, Raj, Mike and Brie will handle these quarterly calls. I’ll be available on the mid-year December call and year-end call next June to answer any questions. The rest of our SMC, we’re going to give this time back to them in order to run the railroad, because the size and scope of this operation needs every minute that they can devote to their day job, rather than to these reports, which will be very adequately handled, as we just — demonstrated by Raj and and Brie and Mike. So, back to you, Mickey.

Mickey FosterVice President, Investor Relations

Thank you for your participation in FedEx Corporation’s fourth quarter earnings conference call. Feel free to call anyone on the Investor Relations team, if you have additional questions about FedEx. Thank you very much.


[Operator Closing Remarks].

Duration: 71 minutes

Call participants:

Mickey FosterVice President, Investor Relations

Frederick W. SmithChairman of the Board and Chief Executive Officer

Rajesh SubramaniamPresident and Chief Operating Officer

Brie CarereExecutive Vice President, Chief Marketing and Communications Officer

Mike LenzExecutive Vice President and Chief Financial Officer

Lance D. MollPresident and Chief Executive Officer, FedEx Freight

John A. SmithPresident and Chief Executive Officer FedEx Ground

Donald F. ColleranPresident and Chief Executive Officer FedEx Express

Brian OssenbeckJPMorgan — Analyst

Bascome MajorsSusquehanna — Analyst

Helane BeckerCowen & Company — Analyst

Ravi ShankerMorgan Stanley — Analyst

David VernonBernstein — Analyst

David CampbellThompson Davis and Company — Analyst

Scott SchneebergerOppenheimer — Analyst

Tom WadewitzUBS — Analyst

Chris WetherbeeCitigroup — Analyst

Jack AtkinsStephens — Analyst

Amit MehrotraDeutsche Bank — Analyst

Ken HoexterBank of America — Analyst

Allison LandryCredit Suisse — Analyst

Allison PoliniakWells Fargo — Analyst

Bruce ChanStifel — Analyst

Duane PfennigwerthEvercore ISI — Analyst

Jordan AlligerGoldman Sachs — Analyst

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Shady payday lenders win big in Supreme Court – people’s world Tue, 20 Jul 2021 03:19:15 +0000 Supreme Court weakened key consumer protections with ruling in favor of payday loan companies / AP WASHINGTON (PAI) —One of the shadiest parts of the business world, payday lenders, won a big victory in the United States Supreme Court. The same is true for the rest of the business class, as judges removed a federal […]]]>

Supreme Court weakened key consumer protections with ruling in favor of payday loan companies / AP

WASHINGTON (PAI) —One of the shadiest parts of the business world, payday lenders, won a big victory in the United States Supreme Court. The same is true for the rest of the business class, as judges removed a federal agency’s power to impose punitive fines.

And with consumers losing out to predators in the judges’ 9-0 decision, Congress may have to step in to right the wrong, the US Public Interest Research Group (USPIRG) said.

This is because businesses, in general, could benefit from the April 22 legal decision in AMG Capital Management v FTC. It takes away the agency’s power to arbitrarily impose heavy punitive fines on businesses that mislead or lie to consumers.

In the 18-page decision, Judge Stephen Breyer wrote that the Federal Trade Commission could still seek and obtain court orders prohibiting such lies.

But the FTC couldn’t fines companies for past practices at all, he said, unless it went through its entire lengthy administrative process. The 107-year-old law establishing the agency says yes to injunctions, Breyer added. But that’s all.

As USPIRG put it concisely, “It means the FTC cannot help consumers get their money back. “

Payday lenders have been known to lend money to the poor and the working class, often people of color who live paycheck to paycheck, advancing them money charged against those checks. Interest rates are reaching triple digits. The AMG rate was 30% per month.

“The language and structure of” Section 13 (b) of the FTC Act, “taken as a whole, indicates that the words“ permanent injunction ”have a limited purpose — an objective that does not extend to the granting of monetary relief. These words are buried in a long provision that focuses on purely injunctive, non-monetary relief, ”Breyer wrote.

However, consumers and the commission are not completely on the sidelines. If the FTC followed its administrative procedural methods, it could still seek and obtain “conditioned and limited monetary relief” from wandering businesses, Breyer said. He didn’t define the sentence.

The Ninth U.S. Court of Appeals had upheld a $ 1.27 billion FTC fine against payday lender AMG and its owner, Scott Tucker, who is now in jail for racketeering. The fine amounted to overpayments AMG forced consumers to pay from 2008 to 2012.

Using an example from lower court decisions, Breyer wrote that AMG would typically charge $ 90 per month on a $ 300 loan. AMG would continue to roll it around by citing unintelligible and barely readable fine print in the loan agreement. The amount owed climbed to $ 975.

The only way the borrower could avoid escalation was to not only repay the $ 390 at the end of a month, but also to explicitly state the contract and its fine print, Breyer noted. Unsaid: Honest businesses let consumers off the hook when they’ve paid off their loans.

The “court’s decision was widely anticipated, but that doesn’t make it any less disappointing or dangerous for American consumers,” said Ed Mierzwinski, USPIRG senior director for federal consumer protection programs.

In response, Congress must act urgently to protect Americans by restoring the power of the FTC to collect money from unscrupulous businesses and individuals such as payday lender Scott Tucker, who has challenged the authority of the FTC in this matter. “

The court “harms the victims of its illegal schemes and leaves the door open for other bad actors to follow its example without fear of serious financial repercussions.”

The victims will not be able to get the money, Breyer wrote for the court. Neither does the FTC, acting on their behalf. But he added that Congress could restore the power of the FTC through legislation.

“Section 13 (b) does not explicitly authorize the commission to obtain court-ordered pecuniary relief, and such relief is precluded by the structure and history of the act,” reads a summary of the decision. . “Section 13 (b) provides that ‘the commission may seek … a permanent injunction.’ According to its terms, this provision concerns a prospective injunctive measure, and not a retrospective pecuniary measure.



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Debunking Payday Loan Myths Tue, 20 Jul 2021 03:19:14 +0000 In the editorial “Payday Loans Are Not Harmful for Low-Income Borrowers” in The Hill’s Congressional Blog on May 6, 2016, Thaya Brook Knight of the Cato Institute explains why payday loans are a necessary product for those who need it. Knight’s defense against payday lenders comes as the Consumer Financial Protection Bureau prepares to announce […]]]>

In the editorial “Payday Loans Are Not Harmful for Low-Income Borrowers” in The Hill’s Congressional Blog on May 6, 2016, Thaya Brook Knight of the Cato Institute explains why payday loans are a necessary product for those who need it. Knight’s defense against payday lenders comes as the Consumer Financial Protection Bureau prepares to announce new rules cracking down on the industry, which Knight says is a paternalistic intrusion.

Knight’s case rests on three arguments. First, that borrowers take out multiple payday loans per year, which indicates satisfaction with the product. Second, payday loans are used for everyday expenses like rent and food. Interrupting a borrower’s access to payday loans would jeopardize their ability to pay these necessary expenses. And finally, that payday loans are necessary due to the lack of suitable alternatives. These arguments represent a fundamental misconception about payday loans, the dangers they present to borrowers, and a refusal to reform a failed industry.

Knight cites a study by Pew Charitable Trusts which examined state regulatory data and found that borrowers take out an average of eight payday loans per year, worth a total of $ 3,000. Knight argues that the concept of “coming back for more” should represent a borrower’s satisfaction with the payday loan, but this is far from the truth. Often, payday lenders entice borrowers by promising them reasonable interest rates, only to increase rates dramatically when the borrower extends the repayment schedule. The borrower is then forced to take out additional payday loans to cover his delinquencies, creating a mountain of debt. Knight says borrowers are no longer in debt on a payday loan in five months, but that doesn’t take into account the additional debt they incurred from subsequent loans.

It is a cycle that I have seen far too often among my constituents in New Mexico. About one in four New Mexicans have turned to securities and payday lenders charging interest rates of 300% on average. The average borrower takes a $ 630 loan and spends $ 1,250 to repay it over a four-month period – if they can afford to repay it. Many refinance the original loan or borrow additional money just to pay the interest on their original loan and find themselves spiraling into disastrous debt. Their cars are foreclosed, rent, utilities and other critical bills go unpaid, and their children are deprived of basic necessities.

This cycle of indebtedness is particularly worrisome considering that, according to Pew, the borrowers surveyed use payday loans for expenses such as rent, food and utilities. A borrower unable to repay their loan – who may already have thousands of dollars in debt – could risk losing their home or not being able to put food on the table. The idea of ​​going into debt just to get out of it is unimaginable and must be mastered. This is why the Pew study cited by Knight concludes that “the payday loan industry sells a product that few people use as designed and that imposes a debt that is consistently more expensive and longer than it is. ad.

A flawed payday loan system, according to Knight, still provides a valuable lifeline for those in need. But if the existing system endangers the credit and the future of its borrowers, what value can it really have? The solution, according to Knight, is to develop new and better products to compete with payday lenders. On this point, we agree. Consumers should have expanded options not only to get the best deal available, but also to avoid having to make a deal with a predatory payday lender.

That’s why I partnered with the Coalition for Safe Loan Alternatives, an organization that brings together local banks, community and religious organizations, and consumer advocates nationwide to develop innovative alternatives to payday loans. We are already seeing that the work is paying off. One of our coalition members, Employee Loan Solutions, offers affordable and secure loans through its TrueConnect program.

TrueConnect partners with employers, allowing them to offer loans to their employees at a reduced rate compared to traditional payday loans. This year, the NM State Senate passed SM 27, a memorial asking the State Personnel Office to investigate the possibility of making this free and risk-free benefit available to State employees. Surveys show that one in five government employees has taken out small loans with triple-digit interest rates. With salaries largely frozen due to tight budgets, there couldn’t be a better time to provide this service.

In addition, community organizations like Native Community Finance offer low-interest financial products and help people trapped in predatory lender debt refinance their loans at affordable rates.

We are doing our part to develop alternatives to payday loans, but there is still work to be done to harness the industry. I hope the Consumer Financial Protection Bureau will recommend strong action against predatory lenders who take advantage of borrowers in need, locking them into perpetual debt and destroying their credit history.

As Thaya Brook Knight acknowledges, loans are needed to help those in need. I couldn’t agree more. The only question is whether those who are able to help will do so responsibly and safely. For the sake of millions of people in need, I hope these changes will take place as soon as possible.

Javier Martinez represents District 11 in the New Mexico House of Representatives and is policy director and general counsel for the Partnership for Community Action.

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More transparency needed in the lending sector – Tue, 20 Jul 2021 03:19:14 +0000 A startup founder called for more transparency in the rapidly changing loan claims space. In recent years, thousands of people who have taken on high cost payday loans, guarantor loans and other loans have been able to claim thousands of pounds on old loans they could not afford. While UK lenders are required to carry […]]]>
A startup founder called for more transparency in the rapidly changing loan claims space. In recent years, thousands of people who have taken on high cost payday loans, guarantor loans and other loans have been able to claim thousands of pounds on old loans they could not afford. While UK lenders are required to carry out sufficient checks by the Financial Conduct Authority, there are a number of clients who slip through the net due to lack of employment, income, poor creditworthiness or a huge backlog of debts already. Subsequently, if a client took on a high cost loan and had trouble repaying, needed new loans, is in arrears with payment, and pays extra fees, they would be a good candidate to receive heavy compensation. . For any UK lender, this is an expensive process. Not only do they potentially pay off the client’s entire loan, interest and some additional compensation, but all complaints investigated by the Financial Ombudsman incur an administration fee of £ 500 whether the claim is successful or not. This huge wave of claims in the loan industry has taken huge losses, including the administration of well-known names like The Money Shop, Wonga, and QuickQuid in recent years. More recently, Amigo Loans of the Guarantor Space took legal action with the Financial Conduct Authority in an attempt to avoid insolvency by offering a 5-10% reparation scheme to former clients who made a claim. As long as the trial continues, it is unlikely that Amigo will be able to make the payment of such a small amount. A startup founder, Dan Kettle, of the Pheabs loan connection service, has raised concerns. “I think we may have a flawed market right now in the lending industry,” he explains. “On the one hand, anyone can legally set up a loan company and offer loans, but any customer can also request repayment and receive additional compensation and the maintenance rates are very high. Thus, creating a very difficult environment in which to operate. “At this rate, lender after lender is falling under administration and it’s alarming, especially when short-term loans are a key poverty reduction measure. Without lenders, where will people go if they need to borrow a few hundred pounds? “It certainly calls for more transparency in the industry, in terms of what you can and can’t lend to – and it will create a much more secure and scalable business model for lenders and their clients.”
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P65B in Versatile Loans from GSIS – Manila Bulletin Tue, 20 Jul 2021 03:19:13 +0000 Over 250,000 members of the Government Service Assurance System (GSIS) have benefited from the Multi-Purpose Loan (MPL) since last year. GSIS, in a statement released on Friday, June 25, announced that it had granted a total of 65 billion pesos in multipurpose loans to its 250,783 members since the program opened on October 1, 2020. […]]]>

Over 250,000 members of the Government Service Assurance System (GSIS) have benefited from the Multi-Purpose Loan (MPL) since last year.

GSIS, in a statement released on Friday, June 25, announced that it had granted a total of 65 billion pesos in multipurpose loans to its 250,783 members since the program opened on October 1, 2020.


“We encourage our other members, especially those who have reached their borrowing limit and were unable to pay off their GSIS loans, to take advantage of GSIS MPL’s affordable payment terms,” said Rolando Ledesma Macasaet, President and Director general of GSIS.

GSIS Versatile Loan (MPL) is the loan facility that consolidates all service loans and waives surcharges on all defaulted loan accounts.

GSIS said qualified member borrowers can claim up to 14 times their basic monthly salary, but not to exceed £ 3 million.

During this time, the new beneficiaries will benefit from an exemption from surcharges on their loan balance.

GSIS explained that MPL prevents penalties incurred by members for unpaid GSIS loans from inflating and eroding their pensions and other benefits.

The MPL also has a low interest rate of seven to eight percent depending on the member’s premium payments and is payable in monthly installments of two to seven years depending on the membership fee and employment status.

“Those with HELP accounts consolidated under MPL can pay off the loan for up to 10 years,” GSIS said. “The payments will automatically be deducted from the borrower’s salary,” he added.

The GSIS explained that those who are qualified to apply to the MPL are active and special members of the GSIS who have paid at least three months of bonuses; are not on leave without pay; not have any administrative or criminal case in progress; have no arrears under the GSIS Financial Assistance Loan or the GSIS Housing Loan; and work in agencies with an existing MoU with GSIS.

“In addition, they must not be marked as suspended by their respective agencies and have a net salary not less than the amount required under the General Appropriations Act after deducting all monthly obligations,” GSIS said. “Their agency should not be suspended either,” he added.

GSIS has also listed its service loans to be consolidated under MPL in the following order: payday loan; Restructured salary loan; Subsidized salary loan; Emergency loan assistance; One month payday loan for the summer; Conso-Loan Plus or Conso-Loan Plus improved; Member cash advance, eCard cash advance or eCard Plus cash advance; Emergency Home Loan Program (HELP); Study assistance loan I and II; Fly Pal, pay later; Study now, pay later; and stock loan.

Meanwhile, GSIS clarified that home loans, policy loans, and emergency loans are not included except for overdue and defaulted emergency loan accounts, in which case the amount overdue or in default will be deducted from the proceeds of the MPL.

Interested applicants can send emails to GSIS branch management or over-the-counter or through a drop box at any GSIS branch and extension offices nationwide.

GSIS said the MPL proceeds would be “directly credited” to the borrower’s GSIS electronic card (eCard) or Unified Multipurpose Identification (UMID) card.



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Dallas Entrepreneur’s Loan Application Takes Loan Convenience From Friends and Family Tue, 20 Jul 2021 03:19:12 +0000 Growing up in social housing, Dennis Cail noticed at the age of 7 that his neighborhood in Monroe, Louisiana had no banks. But there were plenty of payday lenders, check-cashing stores, and car and furniture rental companies. It was Cail’s first experience with predatory lenders in low income areas and it became a lasting memory […]]]>

Growing up in social housing, Dennis Cail noticed at the age of 7 that his neighborhood in Monroe, Louisiana had no banks.

But there were plenty of payday lenders, check-cashing stores, and car and furniture rental companies.

It was Cail’s first experience with predatory lenders in low income areas and it became a lasting memory that would provide a spark years later for his Dallas-based loan application for friends and family.

As a young adult, Cail joined the Navy and saw the same types of places around his base – all urging consumers to spend money on items they couldn’t afford. He realized that he matched the target demographic profile.

“It has become clear that these predatory payday lenders are targeting low-income communities, veterans and minorities, all three of which I am a part of,” Cail said. “I figured if and when I had the time and the resources, this would be an issue I would try to make an impact on.”

After leaving the Navy, Cail received his MBA in Finance from Southern Methodist University and spent years working at IBM Global Services and PricewaterhouseCoopers, and even founded his first company, Uptown Financial Group.

But his desire to create a more equitable loan option stuck with him. When his sister and other family members needed to borrow money to overcome difficult financial situations, he had only limited success in getting his money back.

In 2018, Cail and his co-founder Michael Seay transformed this experience into Zirtue, a relationship-based lending platform that simplifies and formalizes loans between friends and family.

Zirtue does not make the loan. It is a platform that allows borrowing and peer-to-peer lending.

The platform allows people to lend a “financial lifeline” to friends or relatives who are struggling to switch from one bill to another. Thanks to Zirtue, informal pledges become automated repayments and structured agreements, meaning lenders get their money back on time and take the hassle and uncertainty out of the process.

    Dennis Cail from Zirtue
Dennis Cail from Zirtue(Jason Janik / Special Contributor)

For lenders like travel business owner Noah Houghton, the automated platform has saved relationships that would have “otherwise been abandoned.”

“I’m more willing to take loan applications from people I know than before, due to some non-repayments, I was a lot less open,” Houghton said. “I just hated the strangeness between relationships when it happened.”

Houghton said he was now able to help friends and family in need while avoiding the guesswork on loans.

More than $ 184 billion is loaned out to friends and family across the country each year, according to the Federal Reserve Bank.

“On the other side, there’s a person – a human who has to be able to keep the lights on or pay a medical bill in order to get the health care they need,” Cail said. “It is truly a relational business and a human enterprise. “

When people use Zirtue to borrow from friends and family, the app’s partner creditors get paid directly, which means phones stay on and actual day-to-day spending continues.

Sabari Raja de Nepris, an educational technology company in Frisco.

Since Zirtue has no user fees, the company benefits from its partnerships with creditors like AT&T, UT Southwestern Medical Center, and Toyota.

Users can lend and borrow between $ 20 and $ 10,000.

By the end of 2021, Zirtue expects its revenue to increase by 120%. Last year was Zirtue’s first year of official operation, so the company had no prior financial details to release. Last year, Zirtue gained nearly 200,000 registered users.

Many low-income communities are made up of hard-working people looking for a helping hand, not a handout, Cail said.

“You can’t blame people for the situations they were born into,” Cail said. “What you can do is look for ways to create fair and equitable opportunities for people to earn a living wage or to create a way of life where fewer people are part of the working poor population. “

Since the company’s launch in 2018, Zirtue has attracted more than $ 3.5 million in seed capital from investors such as Capital Factory, Google, Morgan Stanley and Northwest Mutual Insurance.

The company has eight full-time employees in Dallas and 12 offshore developers in Eastern Europe. Cail is actively looking to hire Vice Presidents of Growth and Engineering. He expects the team to double in size in the next three months.

“Our big goal is to prove that friends and family are the world’s greatest bank,” Cail said. “Our mission is to foster financial inclusion in North America and abroad. “

Zirtue operates nationwide, with users in every state, and plans to expand into Latin America later this year.

“We have a strong focus on helping the unbanked and underbanked to access capital and resources that they don’t have today,” Cail said. “We are focused on purpose, partnerships and profit. This is how we will achieve the goals we have set for ourselves and for the company.

George Baker, founder, president and CEO of ParkHub, holds a point-of-sale device near a cluster of scanners at the company's Dallas offices.  The device can be used to sell or authorize access to a parking lot or a campsite.
After being fired from her job at an oil and gas company, Lizzy Chesnut Bentley turned to creating cowboy boot options suitable for everyday use by professionals.
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Congress attacks payday lenders after SCOTUS frees them – people’s world Tue, 20 Jul 2021 03:19:12 +0000 Rep. Jan Schakowsky, a veteran Illinois Democrat, is leading the charge to Congress to correct the damage caused by a Supreme Court ruling that allows payday lenders to get off the hook to scam customers. | AP Pictures WASHINGTON – Well, it didn’t take long. A week after the United States Supreme Court unanimously awarded […]]]>

Rep. Jan Schakowsky, a veteran Illinois Democrat, is leading the charge to Congress to correct the damage caused by a Supreme Court ruling that allows payday lenders to get off the hook to scam customers. | AP Pictures

WASHINGTON – Well, it didn’t take long.

A week after the United States Supreme Court unanimously awarded payday lenders to one of the most shady sectors of the corporate class, a major court victory, lawmakers have taken up l author of the decision, Judge Stephen Breyer, that they could overturn the victory.

So consumer advocates came together to tell the House consumer protection subcommittee on April 27 to do so.

They testified how payday lenders scam consumers with triple-digit interest rates and interest stacked on top of the interest. And they urged lawmakers to restore the authority of the Federal Trade Commission to impose heavy fines on these gougers and con artists.

And witnesses have supported HR2668, by panel chair, Rep. Jan Schakowsky, D-Ill., And Rep. Tony Cardenas, D-Calif., To explicitly give the FTC the power to financially crush crooks.

Payday lenders have been known to lend money to the poor and the working class, often people of color who live paycheck to paycheck, by advancing money charged against those checks. Annual interest rates are three digits or more. AMG, the payday lender that sued the FTCcharged monthly interest of 30% in the example cited by Breyer.

HR2668 and the audience applauded the National Consumers League, which has campaigned against the scourge of payday lenders for decades. The April 22 court ruling “put the interests of a convicted con artist above the needs of victims of fraud,” said John Brevault, vice president of public policy for the worker-backed consumer group.

“We are incredibly disheartened by the decision to deprive the FTC of one of its most effective tools for recovering ill-gotten gains from criminals. This move will embolden the criminals who defraud millions of consumers every year, costing them billions of dollars and untold emotional damage.

“We hear almost every day from victims of scams whose financial lives have been ruined by crooks. Consumers need and deserve a consumer protection agency with the power to make them whole. Congress should urgently pass legislation restoring the FTC’s power to seek compensation on behalf of victims of fraud.

The judges had overturned a $ 1.3 billion FTC fine against payday lender Scott Tucker and his company, AMG Capital Management. The fine was equivalent to the amount AMG wiped out of consumers from 2008 to 2012. In addition to charging 30% monthly interest on a typical $ 300 loan, the now racketeering Tucker would continue to rack up the fees, interest on interest – and principal – month after month, just like the rest of the industry.

The only way for the consumer to avoid such a financial burden is to decipher the fine legalistic print of AMR’s loan agreement. This pact stipulated that the only way to opt out was not only to repay the entire loan after one month, but to refuse in writing to let AMR renew it.

Breyer wrote that the FTC went too far and misinterpreted Section 13 (b) of its 107-year-old law by justifying its high fines against AMR and similar crooks. He said the article allowed the FTC to seek court injunctions against such practices, but that was it. He could use another section and lengthy process to seek smaller, unspecified fines to deter potential financial abuse, not to claim past damages, he added.

Not enough to stop them

Witnesses and lawmakers said that was not enough to stop payday lenders.

“For decades, the Federal Trade Commission has protected consumers by seizing and returning stolen money to victims of fraud,” Schakowsky said. The court benefited “crooks and criminals around the world”. HR2668 “will restore the agency’s authority to come to the aid of victims of fraud and scams” and “take money out of the pockets of hard-working Americans.”

Due to the latest ruling and those before it which also hamper the FTC, “the agency that’s supposed to protect me – as well as my 86-year-old mother and teenage daughter, and my former students who are now in the military – no longer has the tools to do its job, ”said University of California law professor Ted Mermin. It is also understaffed, he added.

Without the power to collect hefty fines, “the FTC is unable to perform its most basic function of recovering money for those to whom it has been illegally taken,” added Mermin, who also heads California Low. -Income Consumer Coalition.

As the United States emerges from the coronavirus pandemic, the need for a robust FTC increases, he warned. As the economy recovers from a virus-forced shutdown, “unfair and deceptive practices of all kinds will continue to besiege us. They will particularly target seniors, veterans, low-income communities, communities of color and family businesses. “

The FTC’s “need for public enforcement capacity” is “acute” because 90% of low-income people cannot afford to hire private lawyers to prosecute con artists, and because medical clinics legal aid are overburdened and understaffed, Mermin said.

Although she did not testify before the panel, the Chamber of Commerce, as might be expected, sided with payday lenders and other crooks.

“The FTC is advocating for legislative change on the grounds that it needs the right tools to fight ‘scams’,” the business lobby said. “However, instead of asking for a legislative solution that allows the agency to target such heinous practices,” the FTC wants “a radical expansion of its authority” to allow it to “universally seek monetary damages.”

This inadvertent statement highlighted the real impact of the court’s decision: that it allows all businesses, not just payday lenders, to engage in such practices without the threat of FTC’s high fines don’t deter them – a point the USPIRG made in its exposure of the ruling.



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Russia’s central bank fears new payday lending bubble Tue, 20 Jul 2021 03:19:12 +0000 Russia could be in the middle of a payday lending bubble as struggling households take on short-term, high-interest debt as they emerge from the coronavirus recession, a central bank representative told lawmakers on Monday . “This year we are already seeing a fairly rapid growth in the debt burden of individuals, and in some places […]]]>

Russia could be in the middle of a payday lending bubble as struggling households take on short-term, high-interest debt as they emerge from the coronavirus recession, a central bank representative told lawmakers on Monday .

“This year we are already seeing a fairly rapid growth in the debt burden of individuals, and in some places we can even talk about bubbles,” said business daily Vedomosti citing Ksenia Yudayeva, the first vice president of the Bank, to the financial committee of the State Duma. in a hearing.

Russian household purchasing power fell to its lowest level since 2009 in the first months of the year, according to analysis by Bank of Finland’s Transition Economies Unit (BOFIT) – Coronavirus exacerbating years of cutbacks in living standards spurred by sanctions against Russia. the annexation of Crimea in 2014 and the austere economic policies of the Kremlin.

In response, households replenished credit to help cover daily expenses. The number of payday loans issued hit an all-time high in March, while the volume of loans over 90 days past due rose 20% in the past year to exceed 1 trillion rubles (13.5 trillion rubles). billions of dollars).

This isn’t the first time Russian regulators have feared an increase in lending, as the coronavirus pandemic has only granted a temporary reprieve to a phenomenon that has been going on for years and where household spending is growing faster than income, the gap being covered by higher borrowing rates. In 2019, the Bank supported a series of measures that capped interest rates and required banks to keep more capital available for riskier borrowers.

The Bank is now backing a new round of bills under consideration in the Russian Parliament that would require banks to tell borrowers when a new loan would take them above a 50% debt-to-income ratio – where spending of debt repayment account for more than half of their monthly income – said Yudayeva on Monday.

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National Payday Loan Relief Designs Program to Help Clients Regain Financial Control and Independence Tue, 20 Jul 2021 03:19:11 +0000 OAKLAND PARK, Florida (PRWEB) July 18, 2021 National Payday Loan Relief is one of the best debt consolidation companies in the country. It aims to help debtors overcome loopholes and deadly traps of loan debt and lenders. As the debt and loan crisis grows exponentially in the United States, many families and individuals are sinking […]]]>

National Payday Loan Relief is one of the best debt consolidation companies in the country. It aims to help debtors overcome loopholes and deadly traps of loan debt and lenders.

As the debt and loan crisis grows exponentially in the United States, many families and individuals are sinking into financial debt and being trapped by lenders on every street corner. On the other hand, breakdown companies benefit from a field day because most people don’t know how they operate or the extent of their jurisdiction.

In June 2021, more than 20 million Americans were struggling with endless payday loans anytime soon.

To reduce the burden and increasing expenses, consumers are turning to payday loan consolidation companies to help them pay off their debts within a time frame based on their income. While there are countless companies out there, none work better than the payday consolidation company, National Payday Loan Relief.

The NPDLR service is changing the talk of the day by providing clients with tips and tricks such as loan alternatives and settlement processes. They aim to help clients save money and gradually get out of debt.

Getting out of debt is not the easiest task; the more you plan, the more you sink. National Payday Loan Relief understands that every customer is unique and requires a different approach to solving their debt or loan problem. At this junction, he has built and designed a team of professionals who understand the financial burdens of many people. For the majority, a massive lack of awareness puts them in a crushing financial quagmire than expected.

He created a payday loan consolidation plan to ensure that all clients only get the expected results. It consists of help for payday loans, debt relief for payday loans, and payday loan consolidation. It also offers a debt repayment calculator to keep you up to date while you settle all finance charges.

In addition to the above, they provide a large benefit to clients using their services by helping them understand loan and debt processes through multiple payday loan consolidation, legal aid, and late fee termination. and over-limit to reduce their monthly payments. He also devised a plan to ensure that the client can track the flow of money and allocate income appropriately to settle the debt owed.

However, this is not all. NPDLR knows that extreme interest rates are the reason customers never get out of their payday debts. To this end, they help clients lower their overall interest rates, thus positioning them at a point where debt settlement is effortless, without the endless interest accumulating on them.

Loans and debts are confusing. It does not matter how small or large the amount is. Without the right financial team and the right support, you will continue to be the victim of the lender. National Payday Loan Relief solves any kind of financial crisis if you have it, and let us have it. Ignoring your financial records is stressful, and they can help you become free.

Overall, the goal of the NPDLR and the team is to create viable financial solutions to help clients regain financial control, get out of debt, and be free from constant harassment from creditors or agencies. recovery.

Moreover, declaring bankruptcy is not the only way to get out of debt. He’s helped struggling clients and businesses of all shapes and sizes consolidate their payday debt, repair credit and more, and save massive amounts in the end.

The company’s service is specially designed to reduce the overwhelming impact and effect of debt and loan settlement to a minimum amount based on your income. This ensures that clients are released from their debts as soon as possible.

Suze Orman is a New York bestselling author, financial advisor, TV personality with over 25 million books in 12 languages ​​on personal finance.

She said, “The only way for you to permanently take control of your financial life is to dig deep and get to the root of the problem.”

Suze’s unconventional approach to money dealt with personal finances and growth at the same time and taught the world that if you want to improve personally, your finances must and must be lightened. The only way to do this is to solve the root problem.

While payday loan consolidation is a debt relief service, it doesn’t just take care of the peripherals. It digs deep to resolve the reasons why you are in debt and / or continue to be in debt. This ensures that when you are financially free you will stay that way for the rest of your life.

Living a financially free life is crucial for success, and Victor Hugo, French writer and author of Les Misérables et du Bossu de Notre-Dame, could not have painted a more powerful picture of debt. He said, “A creditor is worse than a slave owner; because the masters only possess your person, but a creditor possesses your dignity and can order it ”.

Quite powerful, and apparently what a lot of people in debt or looking for loans ignore? However, with the extensive resources and support provided by the NPDLR, it is possible to live a debt free life with your income.

Information is fundamental to debt relief, but the right support is essential for success. For this reason, National Payday Loan Relief is your only sure way to get out of debt, start your life financially free, and break the cycle of borrowing, debt, and poverty in your life.

How it works?

NPDLR has an amazing payday loan consolidation relief program that works by looking at the client’s current debts and writing a weekly or bi-weekly payment plan based on their income. This simple payday loan aid offers an affordable repayment plan within 6, 9 or 12 months with low interest and a debt-free life afterwards.

However, the National Payday Loan Assistance is a clear guide and an easy to follow process for consolidating payday loans.

Other loan debt relief services include:

  • Credit Card Debt Relief
  • Mortgage refinancing
  • Payday loan assistance
  • Consolidate payday loans
  • Debt Repayment Calculator

With the NPDLR program, debtors are freed from pushy calls from creditors, allowing them to focus on paying their debt but also getting updates every step of the way.

Payday loan help is quick and easy to solve a financial crisis, but getting out of it is neither quick nor easy. Your only option is the National Payday Loan Relief program.

They offer a free consultation and counseling session to review your financial situation, understand your debt level, who is involved, and devise practical, realistic, and practical ways to get rid of your payday loan debt.

It won’t be wise to dive headfirst into a debt relief process without the proper tool in hand, and many clients do, resulting in debt collapses for years to come. They have created a simplified method to crush your debt and your loan process with your income by reviewing your financial documents and your life.

Getting to a financially free point in your life can seem impossible, especially with the crippling effect of the pandemic on the economy, jobs, businesses, and spending. They said, “We cannot forget the number of people living off credit cards with terrible credit scores across the country.

The average American takes out a payday loan to make basic payments like rent and utilities or other unforeseen and unforeseen expenses. But you can get out of this cycle of borrowing with our help and save money in the process.

Don’t be one of the 12 million Americans drowning in payday debt. We can help. Are you one of the thousands of members of your community crippled by the current debt relief situation and the consequences of the pandemic? We get rid of your debt in the safest, fastest and most convenient way ”.

About Payday Loan Consolidation Debt Relief Program

After 29 years and over 3 million happy and satisfied customers, National Payday Loan Relief knows the inner workings of finance and how to ensure financial freedom for any customer. With a team of financially capable and managerial people, you know you’re in good hands. The debt is not good.

There is absolutely nothing nice about it, and their goal is to help anyone struggling with payday loans pay off their debts based on their income.

It all starts with free advice, consultation, and design to address your problem. Get a payday loan relief quote here.

For more information, visit their office at 3221 NW 10th Terrace, Oakland Park, FL 33309.

You can check their website at or email

To quickly get out of the bumps of the payday loan, contact them at (888) 407-4521.

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Congress Repeals Trump-Era Payday Lender Regulations | Economic news Tue, 20 Jul 2021 03:19:11 +0000 By KEN SWEET, AP Business Writer NEW YORK (AP) – Congress on Thursday overturned a set of regulations enacted in the closing days of the Trump administration that effectively allowed payday lenders to avoid state laws capping interest rates. The House voted 218-208 to overturn the Office of the Comptroller of the Currency’s payday loan […]]]>

By KEN SWEET, AP Business Writer

NEW YORK (AP) – Congress on Thursday overturned a set of regulations enacted in the closing days of the Trump administration that effectively allowed payday lenders to avoid state laws capping interest rates.

The House voted 218-208 to overturn the Office of the Comptroller of the Currency’s payday loan regulations, with a Republican voting with the Democrats.

Thursday’s vote to overturn the OCC’s “real lender rules” marked the first time Democrats in Congress have successfully overturned regulations using the Congressional Review Act.

The law was enacted in the mid-1990s and gives Congress the power to override the rules and regulations of federal agencies with a simple majority vote in the House and Senate. Its powers are limited to a certain period after an agency has finalized its regulations, usually around 60 legislative days.

Political cartoons

The Senate voted 52-47 to overturn OCC rules on May 11. The bill now goes to President Joe Biden, who is expected to sign it.

By overturning the Trump administration rule enacted at the end of 2020, Democrats aimed to stem a payday lender practice that critics had dubbed a “bank hire” program.

While payday lenders are regulated at the state level, the payday lender would partner with a bank with a national banking charter when providing high cost installment loans. Because a national bank is not based in any state, it is not subject to the usury laws of each state.

“State interest rate limits are the easiest way to stop predatory lending, and OCC rules would have bypassed them completely,” said Lauren Saunders, associate director at the National Consumer Law Center , a consumer advocacy group.

This is not the first time that “rent-a-bank” has been a problem. Federal regulators cracked down on the practice in the 1990s, but with the proliferation of online banks and fintech companies specializing in online-only financial services, the practice is growing again.

An example of how the practice works can be seen in Elevate, a Texas-based financial technology company that offers high-cost installment loans, like a payday loan. Elevate offers loans in several states, including Arizona, which has state law capping payday loan interest rates at 36%. Because Elevate uses Utah and Kentucky banks to make these loans, Elevate is able to make Arizona loans up to 149%. In other states, Elevate provides loans with annual interest rates of up to 299%.

In a statement, the person Biden appointed as comptroller of the currency said he would “respect” Congress by rescinding its regulations.

“I want to reaffirm the agency’s long-standing position that predatory lending has no place in the federal banking system,” Acting Currency Comptroller Michael J. Hsu said in a statement.

As Thursday’s vote marked a first for Democrats, former President Donald Trump and a Republican-controlled Congress used the Congressional Review Act when they took office in 2017, overturning 15 rules and regulations passed in the end of the Obama administration.

Before Trump, the law was used only once, in 2001, when Republicans in Congress voted to repeal a set of ergonomic regulations enacted on the last day of the Clinton administration.

On Thursday, the House also used the law to overturn a set of regulations approved by the Equal Employment Opportunity Commission under Trump regarding issues of employment discrimination. The vote was 219-210.

The House is expected to use it again on Friday to overturn Trump-era regulations that would have allowed oil and gas companies to produce more methane when drilling.

Both bills passed in the Senate.

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