FedEx has merged its two separate freight trucking operations in the USA into a single LTLbusiness offering priority and economy services.
FedEx Freight and FedEx National LTL were combined into one company as of end-January to reduceoperating costs and improve the freight division’s profitability. Over the last few months about100 terminals have been shut down and 1,700 jobs reduced out of the 34,000 headcount. The merger isexpected to cost the company $140-170 million in terms of staff severance costs, lease terminationsand various other costs.
In the September-November second quarter, the FedEx Freight segment, which also includes FedExFreight Canada and FedEx Custom Critical, increased revenues by 14% to $1.22 billion with averagedaily LTL shipments up 8%. But its operating loss soared to $91 million from $12 million 12months earlier, largely due to $86 million of merger-related costs. Additional merger-related costsof $54-84 million are expected in the third quarter.
The new-look FedEx Freight will offer two core services, Priority and Economy. FedEx FreightPriority is the fast-transit choice for reliable, time-sensitive LTL freight delivery. FedExFreight Economy is an economical choice for reliable LTL freight delivery. For less time-sensitivefreight, customers benefit by trading time for savings with FedEx Freight Economy.
“FedEx is committed to offering innovative transportation solutions. By providing two reliableservices through one company, FedEx Freight is simplifying the LTL carrier selection process forcustomers,” said William J. Logue, president and CEO, FedEx Freight. “Further, our unique networkdesign and proprietary technology allow FedEx to deliver the service choices to our customers inall lengths of haul.”
Both FedEx Freight LTL services are offered through one pickup and delivery network. Additionalcustomer benefits, according to the company, include one truck for pickup and delivery, one salesrepresentative, one Bill of Lading, a single invoice, simplified account numbers and streamlinedweb applications.
“We are pleased to offer a new approach to LTL, based on attributes our customers have told usthey value. Our streamlined network is engineered to deliver excellent service to customers, whileallowing FedEx Freight to maximise existing capacity and support future growth,” said Logue.
