FedEx Corp. advised shippers on Thursday that they should begin shipping now with the company if they are concerned about service disruptions arising from a possible Teamsters union strike Aug. 1 of UPS Inc.
In a communique Thursday, FedEx (NYSE: FDX) said that the company’s priority is “protecting capacity and service for existing customers.” Customers considering shifting volumes to FedEx, or currently in discussions with the company to open a new account, are “encouraged to begin shipping with FedEx now,” the communique said.
FedEx has said that while it has held productive discussions with UPS (NYSE: UPS) customers, it has yet to see any tangible bump in business as a result of shipper uncertainty over the situation.
On Wednesday, UPS and the Teamsters broke off negotiations over a new master contract, with each side blaming the other for the breakdown. There are no new talks scheduled. The Teamsters have threatened to strike if a contract is not in hand by Aug.1, the day after the current contract expires.
In an email sent Thursday to the company’s global sales and pricing teams, FedEx said that pricing offers with large customers must be signed on or before July 17 or the offer will be withdrawn. The company will honor commitments to large customers who plan to onboard after July 17.
The company will bring on new small to midsize customers as it assesses network capacity. Third parties should shift business immediately as volume shipped during the week of July 17-21 will determine how much capacity will be allocated to them, FedEx said.
Separately, Mike Parra, CEO of the Americas for DHL Express, the international air express unit of DHL, said Thursday that his company hasn’t benefited from shipper concern over a strike. Parra also told FreightWaves at an Atlanta event that he doesn’t want to see a strike, and that a work stoppage would lead to a “total disruption” of the U.S. economy.
“There isn’t a single company on the planet that can handle 24 million shipments a day that UPS manages,” Parra said, a reference to UPS’ total daily volumes mentioned in some publications. A work stoppage would also “impact our employees, and that’s not a good thing,” Parra said.
“This is not the way to earn business,” Parra said about the back and forth. “You want to earn the business the right way.”
Parra was at DHL in 1997 when the Teamsters struck UPS for 15 days. “It was horrific,” he said. “We got flooded with volume, and on Day 16 all of that business went back to UPS. It impacted our loyal customers that have been there with us,” he said.
Michael Hutson
Use FedEx and your package still won’t be delivered even after UPS and teamsters are back in good grounds.
patrick c sheeley
I hope the UPS workers get everything they want, it’s high time for every working man and woman in this country to organize and be union members. We’re tired of CEO’S pocketing tens of millions of dollars a year in salaries. It’s the hourly worker who makes the wheels turn and we want our piece of the pie.
Lin Rapier
I would use the postal service before I used fedex
Steve smith
They are greasy bastards, I’d fire all them and get rid of the teamsters and hire the unemployed.
Kevin Terpstra
I was at FedEx in the 90’s when UPS went on strike and yes it was a cluster and at that time we put red dot stickers on the FedEx “regular” customers and took their packages out and the additional volume from UPS’customers were put under the sort belts and delivered in a couple of days…it was way worse than “peak season” Christmas for us and glad it only lasted 15 days…days off and vacations for hourly workers were cancelled too during this time…but I have to stand with the teamsters and the hard working hourly employees who make the billions for UPS! The amount of money being made by companies today is not being “trickled” down to the hourly workers fairly and when CEO’S are making 1000 times or more than their companies employees average yearly wages then something is truly wrong! Companies continue to cut jobs and benefits to save money which I understand but the remaining employees aren’t reaping the cost cutting measures. I think the question here is how many millions or billions do these upper management types need? Just look at the facts on what the hourly wages will buy today versus 20-30 years ago and one can see that the middle class continues to dwindle. We have to continue to push for economic justice for all people not just the upper class and have billionaires pay their fair share im taxes. The person who won the 1.5 billion lotto deal paid 437 million in taxes and have you ever heard of a billionaire business or owner paying the same? No they haven’t!