The CEO of global freight carrier FedEx, Raj Subramaniam, says a worldwide recession is on its way that will significantly impact economies.

FedEx is based in Memphis, United States.

Subramaniam has seen demand for packages take a major tumble, with FedEx’s business slowing down.

At the moment, we are seeing the tip of the iceberg with this recession.

People simply don’t have the cash to be buying goods and paying freight charges. Spending is slowing down across the world.

“We recognise that current economic conditions are posing new challenges. We remain committed to working with service businesses individually to address the challenges specific to their situation.

“We’re going fully into cost-management mode,”said the FedEx boss.

When pressed into whether what he is seeing at FedEx signals a global recession, Subramaniam replied: “I think so. These numbers ,they don’t portend very well. We are seeing volume decline in every segment around the world. So we just assume at this point that economic conditions are not going to be good.

“We are a reflection of everybody else’s business, especially the high-value economy in the world.”

On Friday, FedEx Corp’s shares had its worst day ever with its price falling by over 24 per cent. The company saw over US$12.5 billion wiped off its market capitalisation.

Subramaniam will now have to close stores, freeze hiring, trim hours and park planes to cut costs.

FedEx will fall US$500 million short of its revenue target with earnings expected to fall by more than 40 per cent.

FedEx Ground Service missed its sale target by $300 million.

“The announcement from FedEx that their revenues were less than expected  and their earnings per share were less than expected was a result of reductions in demand globally and those reductions are exactly what we should expect to see.

“We are going to have a global slowing of economies around the world and that may make a recession in terms of shippers like FedEx,” said economist Dr John E Gnuschke.