FedEx today unveiled plans to reduce staff numbers in the US in response to the uncertain worldeconomic conditions and is facing a $0.7 million fine for breaking hazardous materials
transportation rules.The staffing move is part of a broader restructuring of the US domestic express business toimprove productivity and reduce costs. It follows news on Friday of a near-$700,000 fine by the USaviation authority FAA for breaking rules on hazardous cargo transportation on various occasions in2010.
FedEx announced it will offer voluntary buyout incentives to certain U.S.-based employees inmostly non-operational staff groups, making it possible for employees to retire early. The vastmajority of employees eligible for these incentives are likely to be at FedEx Express and FedExServices but there was no immediate information on how many staff could be affected.
“Analysis is underway to determine which workgroups will be eligible for these incentives, aswell as permitted participation levels by functional area. These incentives will not include anychanges to retirement eligibility or payments. However, employees who are eligible for thisprogramme and who are also eligible to retire may elect to accept the buyout and also retire,”FedEx stated.
FedEx said it will release additional information about the measures and future plans at itsInvestors and Lenders Meeting in Memphis on October 9 and 10 where a detailed presentation of theUS domestic express restructuring is expected. The company’s average daily package volumes in theUS dropped 5% in the March – May 2012 quarter while international priority volumes fell 3% due tolower Asia exports.
Meanwhile, the US Federal Aviation Authority plans to impose a $681,200 penalty on the companyfor allegedly violating rules on shipping hazardous materials (hazmat) in August 2010. The agencysaid FedEx staff improperly accepted several dozen shipments for air transportation and the companyfailed to give pilots accurate information about hazardous shipments on 19 flights to and from LosAngeles. The violations were discovered on an operational inspection.
According to US media, FedEx said that “limited documentation and shipping label errors didoccur” but stressed that public and staff safety was not endangered at any time. The company has 30days to respond formally to the FAA.
