Tom Wadewitz: Yes, good afternoon. So, Raj, if I take a look at what happened last kind of August-September that outcome was quite a bit different than you expected, I think your international fell off quite a bit, maybe some other things, and I think the way you guided looking forward, if we look at your results in November quarter and February quarter, you set a bar that was achievable, maybe you just executed a little better? How do you think about the guidance that you’re giving us for fiscal ’24? You’ve talked about the different macro assumptions in revenue, but is there some element of having a conservative bar, where you could potentially do better on cost or maybe pricing comes in a bit better, just kind of reflecting what seem to be a pattern of giving yourself a little bit of room to overachieve in the last couple of quarters? Thank you.
Raj Subramaniam: Tom, firstly, I may say this much, as I said in my prepared remarks, this is the first time in history of FedEx that’s in the FedEx Ground where the volumes declined and our operating margin expanded. So clearly this is beyond just flexing for volume and we have — this is really DRIVE taking effect as well. So this is — we’re just very, very pleased with how John and his team is performing in Ground, and by the way I’ll give kudos to the Express team and Richard’s team as well, as we have started to see significant improvement in the fourth quarter. To your question about the macro. So when we talked in September, we pointed to three things. We said that the industrial economy was slowing down and because of inflation, interest rates, and slowdown in global trade, we said that the consumer spending was shifting to services versus goods.
And then thirdly, there was an e-commerce reset coming out of — coming out of the pandemic. Well, all those three things happened and they were detrimental to volume for the whole industry, so I mean roughly the same revenue performance on the calendar quarter that is comparable across the sector. If you look ahead here, at this point, the one and two are basically along the same lines we have seen in the last few months. I think on the e-commerce side, we expect to see growth now. I think the reset is probably complete and e-commerce is going to grow into the next calendar — sorry, the next — this FY ‘24 timeframe. So, we’re watching this very carefully. The visibility, especially in the second-half is very difficult, given the dynamic circumstances we are seeing.
We will see how the industrial production goes. We’ll see how GDP and trade goes, and we’ll follow the inventory stocking and inventory to sales ratio very carefully, and — but at the end of the day, we are focused on the things we can control. We made a determination that we are going to come out of this stronger than we went in and exactly what we’re doing and I’m very, very pleased with the way we are executing DRIVE. So sorry for the long answer, Tom, but I thought I want to give you a full perspective there.
Mike Lenz: And Tom, this is Mike, I want to just amplify one aspect there as well to just highlight, we talked about Ground and the progress of the numbers there, but there has been tremendous progress at Express amidst the headwinds here. So you ask about the guidance broadly, but keep in mind all $800 million of that, international headwind is at Express, as a non-recurring headwind, a significant component of the variable compensation is at Express. And the domestic freight headwind that Brie alluded to earlier, that’s about $400 million, right there as a headwind in ’24, so despite all of that, through the discipline and rigor of DRIVE, and a muted demand environment, we are projecting up margins at Express in ’24. So again, just to reiterate, we’re looking at this very thoughtfully and are planning to adapt to any further changes in the environment.
