I can’t see those companies having total trust in FedEx Freight going forward or at least not for a long time,” the source said. There were some fingers and toes of some pretty large organizations that got cut. The way it was done, how quickly, basically they just took a machete and sliced away. “It probably loosened up some short-term things for them.
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Of the FedEx representatives the source spoke with, none were 100% sure of the criteria used to implement the embargoes, but indicated that it was done to free up capacity in the most critical areas.
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“The trend increased further in June.”īarnes did note that FedEx had a lower average change in requested time versus pickup time than the rest of the industry heading into May.Īn unnamed source with another third-party logistics provider told FreightWaves that FedEx had been flying drivers commercially around the country to position them in the areas of its network with the greatest need in the week leading up to the announcement. However, for FedEx Freight, there was a half-day increase in the average change during May and June compared to its average for the prior two months,” according to Tommy Barnes, chief revenue officer at M圜arrier. “The shipment data which looked at changes in the requested pickup date from shippers to the actual pickup date by carriers declined by one day on average during June when compared to the prior three-month period.
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The carrier’s performance scorecard, which includes ratings for on-time percentages, metrics involving pickups and deliveries, as well as damages and claims data, hit a 2021 low prior to the service alert.įedEx’s struggles were also evident at M圜arrier, a software company with an LTL transportation management system for small and midsize shippers. The carrier has since tamped down some of its service cancellations following pushback from shippers and is now taking a more targeted approach when choosing which accounts and freight it will no longer haul.ĭata from Recon Logistics, a third-party logistics and transportation management system provider, highlights the sag in service metrics at FedEx Freight heading into the announcement. However, the steps to ease congestion, improve service levels and reduce operating costs stirred the ire of shippers in the days that followed. Robust trucking demand and a labor shortage among both drivers and dockworkers were some of the catalysts behind FedEx’s decision to cancel service to some customers. FedEx Freight temporarily taps out data shows carrier struggled to keep pace in weeks leading up to announcement The abruptly implemented notice designed to “control capacity and avoid backlogs in the most capacity constrained freight service centers” left shippers with only a weekend to find alternatives. However, none of those actions have been as jarring as a June 11 notice from FedEx Freight ( NYSE: FDX) to some 1,400 customers that it would no longer pick up freight from locations that don’t fit its operational requirements. The heavier shipments can clog pickup and delivery operations designed to move freight in and out of LTL networks quickly, as they require longer unloading times and can tie up an entire trailer, which often means tying up another driver. LTL carriers also have been actively limiting larger shipment weights that have spilled over from a capacity-constrained truckload market.
Most of the actions have included rate bumps and stricter enforcement of accessorials and detention fees in efforts to free themselves from shippers that have suboptimal freight and facility operations. Less-than-truckload carriers have quietly been using a high-demand, tight capacity environment to cull less profitable freight from their networks for months now.
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