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FedEx ran into $600 million in costs related to the spinoff of its FedEx Freight less-than-truckload trucking division, per its 1Q26 earnings report.

Why it matters: The costs were largely IT- and systems-related, CFO John Dietrich said during an earnings call Thursday evening.

What they're saying: "There are some staffing costs, but I would say those are small in the scheme of things," Dietrich told investors.

Catch up quick: The split, announced in December 2024, remains on track to occur by June 2026.

State of play: The spinoff reflects investors' preference for pure-play operations and the distinct challenges of running less-than-truckload and parcel carriers.

Context: Rival UPS sold its LTL unit, UPS Freight, to Canada-based TFI International in 2021 for $800 million.

UPS was later fined $45 million by the SEC to settle charges it overvalued the business ahead of the deal.

Zoom out: The split has the potential to reshuffle freight volumes across a desperate trucking industry withering in a demand drought.

Zoom in: FedEx Freight, which will trade as FDXF, will remain the largest LTL carrier in the nation. 

What's next: The spinoff remains on track for June 2026, CEO Raj Subramaniam said on the call.

Katherine Davis contributed to this article.

FedEx reports $600M in costs related to Freight spinoff

The costs were largely IT- and systems-related, SVP and CFO John Dietrich said during an earnings call Thursday evening.

A FedEx Freight truck makes a home delivery in Santa Fe, New Mexico.

A FedEx Freight truck makes a home delivery in Santa Fe, N.M. Photo: Robert Alexander/Getty Images

FedEx ran into $600 million in costs related to the spinoff of its FedEx Freight less-than-truckload trucking division, per <a class="gtmContentClick" data-vars-link-text="its 1Q26 earnings report" data-vars-click-url="https://investors.fedex.com/news-and-events/investor-news/investor-news-details/2025/FedEx-Reports-First-Quarter-Earnings-Growth-Year-Over-Year/default.aspx" data-vars-content-id="bd0e9ea9-4185-4fd9-b6a9-afe32afd2647" data-vars-headline="FedEx reports $600M in costs related to Freight spinoff" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://investors.fedex.com/news-and-events/investor-news/investor-news-details/2025/FedEx-Reports-First-Quarter-Earnings-Growth-Year-Over-Year/default.aspx" target="_blank">its 1Q26 earnings report</a>.Why it matters: The costs were largely IT- and systems-related, CFO John Dietrich said during an earnings call Thursday evening.

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FedEx reports $600M in costs related to Freight spinoff

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