Jonathan Chappell: Thank you. Good afternoon. John, just keeping with that, you mentioned a few times now that the costs were kind of above and beyond what you’d expect — what you would normally have for this type of demand environment and you’re laser-focused on it. Are those costs that I would imagine variable that you would look to pull out pretty quickly over the course of the next couple of months, especially with the seasonal slowdown in Express? Or do you have to kind of manage keeping some of those costs on, as you noted, for when volumes come back? Just trying to think again about the pace of the margin improvement potential at Express, can it happen very quickly or do you kind of have to keep a little bit more cost on just in case the demand comes back sooner than expected?
John Dietrich: Great. Thank you. That’s really a great question. And, I think the answer is yes to all of that, right. And what I would throw in as well is, maintaining our high standards of service that Brie talked about. We’re factoring in all those factors, the ability to take on additional volumes when it returns, coupled with maintaining the highest quality service that Brie talked about, but also with a sense of urgency to be focused on that which we can take out as quickly as possible, without prejudicing those two very important factors.
Operator: Your next question will come from Bascome Majors with Susquehanna. Please go ahead.
Bascome Majors: Thanks for taking our questions. It sounds like the deferred day network underutilization there with your core customer has been a bigger problem than when he has realized the bottom-line of Express. Can you talk a little bit about if we get to a point where you do end up walking away or significantly downsizing that customer into next year? What are your options for consolidating that network, either with some of your Ground opportunities or the night network? Are there options for the day network going away sizeably by subtraction trend into next year and the year beyond? Thank you.
Brie Carere: Yes. It’s a fair question. One of the things that we have been pretty candid about is that we are planning actively for both scenarios, that we are working in completely good faith to maintain this relationship and improve the profitability and deliver the service that USPS would like and we think quite frankly that FedEx is uniquely positioned to deliver. And parallel, through our DRIVE initiatives, we already are working our plan if that is not the case so that we can continue to grow Express margin and deliver on our DRIVE commitments, as we have previously stated.
Operator: The next question will come from Brian Ossenbeck with J.P. Morgan. Please go ahead.
Brian Ossenbeck: Thanks. Good afternoon. So, as mentioned a few times that fuel was a headwind for yields, surcharges were coming down. Can you maybe give some context around that? Did that have the timing effect? So, did that have any negative impact on operating income? And certainly, what do you think for the rest of this year? And then, Brie, maybe you can talk a little bit about, in Freight with the auction that went on a couple weeks ago. There is another one going on right now. You’ve closed a few facilities. Do you still think that market stays disciplined now that some of the capacity has changed stance? Thank you.
Brie Carere: Yes. Great question. And we’ll start with the second one first. We are seeing, yes, a very disciplined freight market and I will say, I think we’re leading in disciplined freight. If you look at the volume that we took during the summer, we really like what we got. We actually were quite surprised that we found some really high-yielding customers and those customers have been very vocal about the great service that FedEx Freight is delivering, and so market is rational, we’re delivering a great service. Lance and the team have just done an outstanding job. And so, we continue to be very optimistic about the margin profile in the future of FedEx Freight. I have to admit I forgot the first half of the question.
Brie Carere: Thank you. So, yes, fuel was a headwind, obviously, at the top-line and the bottom-line in the quarter. Moving forward, we do anticipate that fuel overall will be a headwind for the year.
Operator: The next question will come from Jordan Alliger with Goldman Sachs. Please go ahead.
Jordan Alliger: Yes, hi. I just had a question more on the macro. Is it your expectation that there is not going to be any macro improvement for the balance of this fiscal year or maybe even for all of calendar 2024? I mean, there has been a lot of destocking, online sales weren’t too bad, and some would say, consumer spend might be pretty good next year. So, just sort of curious, your thoughts or color on the macro expectations that you’ve thought through in terms of your numbers. Thanks.
Raj Subramaniam: Yes. Thank you, Jordan. I think on the macro, we have been pretty consistent over the last few quarters about some of the — two or three things. One is that the industrial production around the world continues to be weak, and again, that’s reflected in our Express Freight numbers and even in our domestic Express numbers. Even though we are growing faster than the market, we — these are headwinds to the industry — for the industry volume. On consumer spending, I think the mix between goods and services, I think now that’s nearly back to the pre-pandemic levels. As far as inventory is concerned, we believe that the inventory destocking phase is over. And but the restocking phase is yet to begin in earnest. So, we — for the rest of the fiscal year, we have assumed — we are not assuming any kind of improvement in these trends.
Obviously, if that changes, that will be a positive. And we are definitely — and we’ve said this over and over again over the last few quarters, we are have focused on the things that we can control and that’s why we are so focused on the execution of DRIVE and again, I’ll just reiterate that I am so proud of the team for delivering a meaningful bottom-line improvement despite the challenges in the top-line.
Operator: The next question will come from Scott Schneeberger with Oppenheimer. Please go ahead.
Scott Schneeberger: Thanks very much for taking the question. It’s, Brie, probably for you. Could you address, as you took a good amount of share over the summer from UPS, and its situation? What are you seeing competitively out there now that we’re in peak season as far as, it was asked a little earlier on pricing, but how are you holding up as far as maintaining your customers, if you could address this on large, and on small and mid-size? And it’s a go-forward question as well, going into the next year and how you think you’ll hold up there? Thanks.
