FedEx Freight, the less-than-truckload arm of FedEx Corp. and the nation’s largest LTL carrier, said Saturday it will furlough an undetermined number of drivers starting in early December.
The furloughs are scheduled to last about 90 days, during which time affected workers will continue to receive health benefits and will be allowed to file for unemployment benefits in their respective states of residence. Some eligible employees will be offered permanent transfer opportunities to other markets that have hiring needs, the unit said in a statement.
The furloughs are expected to affect a small number of drivers, and not all facilities will be targeted, said Miranda Yarbro, a FedEx Freight spokesperson. The furloughs will be voluntary, Yarbro added.
“Because of our previous experience with furlough and with the incentives we are offering, we are expecting employees to volunteer to meet the business need,” Yarbro said in an email.
The unit employs about 45,000 people. It was not immediately clear how many drivers it employs.
The action was taken in response to slowing macroeconomic conditions that have impacted LTL demand in recent weeks, the unit said. The LTL segment, which has shown very strong growth coming out of the pandemic, has seen volumes level off recently due to economic uncertainty caused by high inflation and recession concerns.
FedEx Freight has been the best performer of FedEx’s (NYSE: FDX) three transport business units. Its two larger units, FedEx Express and FedEx Ground, have been hurt by high costs and slower-than-expected demand. FedEx Freight, by contrast, has focused on profitable growth and has been willing to shed unprofitable tonnage to achieve that goal.
In its fiscal 2023 first quarter, which ended Aug. 31, FedEx Freight’s operating income increased 67%. The gains were driven by actions to improve shipment yields, as well as the positive impact of higher fuel surcharges, the parent reported.
If you are a FedEx Freight employee with a story to share, email the reporter at msolomon@freightwaves.com.
Alec
There is NO driver shortage! There is a driver earnings shortage, excess capacity relative to demand, that suppresses freight rates.
Private
It’s the whole Infrastructure, fuel and inflation issues combined. Shoppers aren’t buying, products from ports can’t get to manufacturers due to driver shortage and diesel issues. So manufacturers aren’t producing therefore shipments get effected.
Greg Luckow
When we at FedEx Freight had furloughs during the Covid thing people were lining up to get the time off. Of course there was an extra $600 added to the $538 I received in unemployment.
Anita Watson
FedEx does not do as good of a job delivering as ups. I have had to return several packages this last year due to being damaged in shipping from them.
Ron
It’s really unbelievable that FedEx says it’s because of inflation knowing inflation is temporary and coming down…this is the type of company people should just stop using..just stop. I won’t use them again.
Gerry Johnston
I work for FedEx Freight and the drivers can can come off the road and work the dock and still retain their driver pay. The drivers can replace the part time dockworkers but can’t replace the full time.
Gariba Mohammed
Hello fedex do you still hire newly graduate of CDL class A drivers?
Dennis sanders
I worked for these people for several years . Worst company in the country. They have no loyalty to their employees. I feel bad about the people getting laid off . That’s what they did to me and others . It was permanent and they hired all new people 2 weeks later. Saved money