Shares in parcel delivery giant FedEx were down up to 5.8% yesterday due to a bleaker profit forecast with tariffs impacting operations.

FedEx’s business includes a massive package shipping operation between China and the US, but this business is being impacted by tariffs of 30%. China tariffs previously had been 145%.

It’s not just China. Services from other countries worldwide that ship to the US are impacted.

Compounding problems is the application of tariffs to goods worth less than $800. They previously were exempt under ‘de minimis’ provisions.

The expected loss of revenue through a decrease in transport and delivery services indicates a pull-back of the use of these services by other industries. This in turn impacts their profitability.

FedEx’s share price plunged after it said its earnings per share of $3.40 to $4 would be below an expected $4.05 in the current quarter.

Investors were caught off guard when FedEx failed to provide a full year forecast, which JP Morgan branded as a ‘negative surprise’.

Shares in competitors DHL and United Parcel Services were also down by as much as 2%.

Speaking with The New York Post, Russ Mould, investment director at AJ Bell, said FedEx’s inability to deliver an outlook for the year “may result in some consternation in the markets beyond just the fortunes of FedEx itself”.

Michael Ashley Schulman, partner at Running Point Capital Advisors, also expressed concern about a broader impact.

“FedEx is like the economy’s Fitbit. Express shows business demand, Ground tracks e-commerce, and Freight reflects industrial strength. Right now, all three are looking sluggish,” he told The New York Post.