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.
Robert
@Mike regarding Owen’s comment concerning Fed Ex Freight 32 years
If you want to get technical, Fed Ex bought American Freightways in 2001, which would be 21 years.
If he is counting his time at American Freightways, they switched from being Arkansas Freightways around 1990, then until 2001 would be 11 years. 21 years plus 11 years equal 32. Hope this clears up the confusion.
Shawn Michaels
I can tell you that it has slowed down significantly the last month. Fed-Ex posted a story about 6 weeks ago stating the freight has dried up and now they are pushing for layoffs. The lack of parts, shipping issues overseas and production delays are all contributing to the issue.
Marla Campbell
How will this affect delivery drivers?
Frank Bannon
Most shippers have learned to ship as a partial/LTL on truckload carriers. Common carriers are too expensive unless you have a huge volume, they damage and lose about 30% of the shipments and it takes 2-3 weeks to deliver… Why not pay the same price and have a guy in a Sprinter van or Hotshot haul it with full visiblity throughout transit? The LTL carriers did it to themsleves.
Christopher Snyder
This smacks of a diesel fuel shortage issue to me. The timing is impeccable.
Terry
I think someone is smoking while someone else holds a mirror. We in Industry like everyone else are waiting extended periods nearly a year in many cases on products. While a certain anount can be attributed to an IC chip shortage ( we should probably discuss why we cant get ICs but we will leave that for later.) Most companies are stateing they are having problems getting freight moved. Yet this article says that there isnt enough freight to move. Hmmmm…
Robert Davidson
While I empathize for the drivers involved, I do not have any sympathy for Fred Smith. I was a former contractor at RPS (Roadway Package System-now known as Fed Ex Ground) Fred ruined RPS/FEG by bringing in the concept of ISP contractors, an idea he probably stole from the old Airborne Express (now known as DHL), they used cartage companies in smaller markets.
A lot of the ISP contractors are like the individuals who showed up for RPS meetings in the 1990’s, but didn’t want to do the grunt work required of contractors then. They wanted to “stand and point”.
In addition to RPS, Fred ruined American Freightways and Watkins Motor Lines.
Nathan
Go to UPS