John Dietrich: And let me start by saying on that $2.2 billion, that’s certainly our goal to have that all flow through. But we have to be realistic and understand that a lot of the pressures that we’re seeing today are expected to continue for a while. And while we’re going to continue to focus on those things within our control, there are certain things outside of our control. And so our goal is to have as much pass through to the bottom line as possible and we look forward to keeping you up to speed on that, including when we next talk in June. With regard to Ground, exceptional story, exceptional performance from the team. I believe those margins are sustainable. And there’s still a number of projects in the pipeline that allow us to continue to grow and expand that business and those margins. So again, that’s going to be our focus as well.
Operator: The next question comes from Helane Becker with TD Cowen.
Helane Becker: I have, I guess, two questions. One is, as part of the whole redesign of the network and the business and collapsing everything into one. Have you thought about shifting to a calendar year rather than staying on a May fiscal year? And my second question is maybe for Raj. A lot of investors push back to me about the business that the way you’re structuring the business, and I noticed the stock aftermarket was up quite a lot after the earnings release. Why do you think investors are so skeptical of your business plan and aren’t willing to give you the credit that maybe you deserve for the changes you’ve made as speedily as you’ve made them?
John Dietrich: I’ll start on the first part on the calendar year. As you’d expect with everything going on, there’s legal and accounting exercises that need to take place to get us through this next period, including June 1 date of One FedEx. But I can share, it’s certainly on my radar to migrate towards that and we’ll keep you posted on developments towards that.
Raj Subramaniam: And Helane, as part to your second question, all I can say is that we, as a team, are very much convinced that we have a unique story at FedEx here. At the opportunities that we have won in the industry is one thing, but within the industry, we have a unique opportunity because of the strategies that we have deployed. We started moving early than anybody else. We are performing better than our competition, both on the top and the bottom line. And we have a longer runway because of the opportunities we have identified. And so we will try to educate as many people as we possibly can on our strategy and where we are. But we are just seeing the early stages of what’s possible at FedEx. Any one particular quarter sometimes kind of throw you off but the long term strategy is sound and we all believe in it, and it’s going to be a good run in the next three, four years.
Operator: The next question is from Ravi Shanker with Morgan Stanley.
Ravi Shanker: Apologies if I missed this, but regarding the USPS contract, kind of when do you expect that reach fruition? Is that something that happened in FY24 or ’25? Can you also share how much of the volume has come off already and kind of how much would you dimension kind of that net with the new contract ends up being?
Brie Carere: From a USPS contract, I really can’t say more than I already said earlier. In short, we are feeling very positive about the negotiations, both parties are working eagerly, we’re at the table. I think we are days or weeks away from knowing if we will have a contract, not months. And as we have shared previously, their current contract ends on September 29th. So we will know very, very soon. And I’m certainly not at liberty to talk about the details of a future contract.
Operator: The next question is from Stephanie Moore with Jefferies.
Stephanie Moore: I appreciate the incremental color on Network 2.0. And I was hoping you could maybe provide a little bit of color in terms of some of the investments that have to be made in order to execute on the integration, particularly as you enter or you be in the execution in a much larger market like Canada. Any color in terms of maybe lessons learned from your Alaska and Hawaii integration and then what investments we should expect to see as you implemented in Canada?
John Dietrich: Yes, certainly, there’s going to be some investment required when you’re consolidating facilities, particularly sort facilities but there’s also upside in that you’re able to reduce your facilities footprint along the way. So that will involve certainly some planning and processes, analysis and all that. But we’re excited actually about the end game here and that is our overall footprint will far — the benefits of that will far exceed the investment and contribute to a really efficient network.
Brie Carere: And honestly, from lessons learned, I think the team feels really good about their execution to date, to Raj’s point, we have seen kind of the P&D benefits that we anticipated as well as we’ve seen the team be able to execute from a service perspective. I will say we are being very disciplined, we’re being very methodical and we are giving customers the advanced notice as we go into market. That was one piece of feedback for customers. Even though we anticipate being able to deliver the same level of service with the combined organization as we are as the individual, they do want that notification. And so we, of course, are giving customers that advanced notification. And to Raj’s point, on the positive, I cannot under-emphasize how important that single pickup is to our small customer segment. This has been the only feature gap we had to UPS in that segment and we are about to close it. So I’m pretty excited about that.
