The recent Caribbean/US east coast hurricanes and cyber crime both impacted the start of FedEx’s 2018 fiscal year, according to chairman and founder Fred Smith, who said: “The TNT Express cyberattack and Hurricane Harvey posed significant challenges to our operations in the first quarter.”

The June 'NotPetya' cyberattack on FedEx’s TNT Express cost it about US$300 million of operating income (in lost revenue). 

 

First-quarter revenue and operating income of US$4.64 billion and US$626 million still rose compared to 2017-18, but that improvement came mainly from average daily package volume growth of four per cent and higher base rates.

 

Consequently, FedEx has reported a lower operating margin of 13.5 per cent, down 0.7 points from the same quarter during the 2017 fiscal year. 

 

FedEx’s Express segment including TNT Express saw operating income fall to US$433 million for the quarter because of the cyberattack, down from US$610 million during Q1  FY2017. The operating margin fell to five per cent, compared with 7.2 percent during the same quarter of FY2017.

 

Hurricanes Harvey and Irma meant airports cancelled flights and logistics operations ground to a temporary halt. 

 

However, recovery was swift, thanks to early preparations.

 

FedEx now will work on integrating Dutch TNT Express with its FedEx operations, with a completion date expected by the end of FY2020.