Global supply lines are showing signs of improvement…
According to CNBC, Long Beach Port director Mario Cordero said California ports have begun to address shipping container and cargo ship backlogs.
He noted that while disruptions are continuing, Long Beach and Los Angeles are making strides in alleviating current constraints.
This is because these operations have implemented a fine to those that do not offload containers. For every container left at the ports, companies will be required to pay $100 per day if left for more than nine days.
And with these two areas accounting for as much as 40% of sea freight entering the U.S., many businesses have worked day and night to avoid fines and reduce broader congestion. In turn, the state has reported more than a 30% decrease in stagnant cargo containers.
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These factors have helped to alleviate some issues for shipping and delivery company FedEx (FDX).
In the company’s second quarter, FedEx reported earnings per share of $4.83 compared with the expected $4.28. FedEx’s revenue was $23.5 billion, beating the anticipated $22.41 billion.
And with improving supply chains, the shipping firm expects this momentum will continue. FedEx explained that it will likely deliver 100 million more packages than it did in 2019.
The company also forecasts its earnings per share will come in at around $20.50 to $21.50 versus its previous guidance of $19.75 to $21.
So, these financials and gradual improvements within the U.S.’s supply chains, indicate that distribution delays may decrease. In turn, it should enable FedEx to tackle pent-up demand from customers and businesses, potentially boosting its profits in the months ahead.
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