Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of FedEx Are Falling Today

By Lou Whiteman – May 1, 2020 at 1:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

FedEx workers are joining in a nationwide May Day walkout.

What happened

Shares of FedEx (FDX -1.07%) fell more than 5% on Friday as the shipping and transport giant was among the targets of a nationwide one-day strike protesting worker safety during the COVID-19 pandemic.

So what

FedEx falls into a category of companies that have seen parts of their business increase due to the pandemic, with consumers increasingly turning to online orders for their basic staples in response to government advisories to stay at home. FedEx says it has prioritized the safety of its workers and is taking added steps to try to keep its facilities clean and virus-free, but for at least some workers, apparently the company is not doing enough.

Two FedEx trucks parked at a distribution center

Image source: FedEx.

A national coalition of workers from FedEx,, and Walmart, among others, have organized to call attention to work safety, according to The Intercept. The employees will call out sick or walk off the job during their lunch breaks on May 1, a traditional day to honor worker rights.

Most of the companies targeted are also frequent targets of labor organizing campaigns, and investors could be reacting because this is unlikely to be a one-day protest. With front-line worker complaints about warehouse and distribution safety getting a fresh spotlight due to the pandemic, the momentum to unionize different sectors of the economy could build even after the virus is contained.

Now what

In the near term, the protestors have a list of demands that could potentially incrementally add to costs at FedEx in the quarters to come, including compensation for unpaid time off, hazard pay or paid sick leave through the duration of the pandemic, and added protective equipment.

Over the longer term, the employer/employee dynamic at companies such as FedEx could be forced to change as a result of the pandemic. That's not necessarily a bad thing, and a lot of companies -- including FedEx rival United Parcel Service -- have survived and thrived with heavily unionized workforces. But Wall Street tends to be resistant to change, and the high-profile Friday demonstrations seem to have spooked FedEx investors.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Lou Whiteman owns shares of FedEx. The Motley Fool owns shares of and recommends Amazon and FedEx and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

FedEx Corporation Stock Quote
FedEx Corporation
$155.19 (-1.07%) $-1.68

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.