FedEx CEO predicted a global recession a year ago and shares his current outlook.

• Raj Subramaniam, CEO of FedEx, maintains that his prediction from September 2022 about the slowing of global trade and industrial economies is accurate.
• In September 2022, the logistics giant announced a "worldwide recession" due to weak results, despite outperforming the market this year with structural changes and improved operating profits.
• Despite the global economy avoiding recession, the slowing trend persists, according to him.

In September 2022, Raj Subramaniam predicted a worldwide recession due to weak results that negatively impacted the company's stock. Although a recession hasn't occurred, the FedEx CEO maintains that several factors contributing to his pessimistic outlook still exist.

Subramaniam stated during the CNBC Global Evolve virtual summit on Thursday that the global industrial economy and international trade are still in a slowing environment, which was accurately predicted.

He mentioned three trends in the Evolve interview, including the shift from goods to services spending after the pandemic, which affected the business outlook for shippers. However, he noted that this trend is now beginning to normalize and return to pre-pandemic levels.

The level of online orders pre-pandemic has now begun to normalize, with an "e-commerce reset."

Subramaniam informed CNBC's Holland that those are three negative aspects affecting our industry, as he had previously stated.

The goods boom ended, and big retailers like Walmart and Target forecast demand incorrectly, resulting in inventory destocking. Now, the destock period has ended, but retailers have not yet begun restocking.

In an upcoming Evolve interview, CEO Brian Cornell stated that consumers are cutting back, even on grocery purchases.

The FedEx CEO emphasized that he made his decision "early" to ensure the company became "significantly more efficient," allowing it to weather a slowing global economy better. Despite a decline in volume, FedEx's operating profits have increased for the first time during a demand downturn in the company's history, he stated.

This year, FedEx shares have outperformed both the market and its main competitor, which has fallen nearly 20%.

Despite exceeding expectations, both the US and Chinese GDP growth rates have caused FedEx CEO to remain cautious.

He stated that the global trade environment is currently soft and they are anticipating an inventory restocking to occur, which they will closely monitor in the upcoming months.

CEOs of logistics companies are concerned about the future of both demand and freight business models, which have been severely impacted by the recession in the freight market. Shipping container rates have dropped significantly this year due to weak demand, and companies such as Convoy have cited a "massive freight recession."

Uber Freight's CEO stated on CNBC on Thursday that there is a "new tipping point" in the market due to the risk of more fuel price shocks, which is already challenging the profitability of many smaller companies.

The number of warnings from C-suite executives about weak demand from within the S&P 500 and Stoxx Europe 600 universes of companies is on track to reach an all-time high at the halfway mark of earnings this week, according to Bloomberg data going back to 2000.

Subramaniam avoided directly making another recession call.

He stated that economists would determine the economy, but he observed that the industrial economy was slow in many regions globally, and consumer spending, although high on services, was resetting and hoped to return positively in 2024.

Predicting the short-term is challenging, as it's difficult to forecast the next quarter or quarter after that," he stated. He added that FedEx has experienced a 6% compound annual growth rate from the turn of the century to the present, and before the pandemic, it was growing at a 6% equilibrium rate. "We will reach that point, but I cannot specify which particular quarter it will be.

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