The company continued to see a rise in costs, resulting in a nearly 180 bps y-o-y drop in operating margin to 5.3% on an adjusted basis. FedEx in Q1 announced its plans to reduce costs, including shutting down some of its offices, cutting its flight frequencies, and canceling some of its network capacity projects, among other actions. That said, there are near-term headwinds with fears of a recession in 2023, high inflation, rising interest rates, and a strengthening dollar, which is likely to weigh on the overall earnings for FedEx in the near term.