FedEx launches expanded LTL service for US
FedEx has launched a new unified less-than-truckload (LTL) shipping service for the United States, completing consolidation of its FedEx Freight and National LTL divisions. The new service under the FedEx Freight banner offers a single network providing two levels of service – Priority and Economy – for all delivery distances in the US.
FedEx Freight Priority option promises a service for time-sensitive LTL freight, while FedEx Freight Economy will mean cost savings for shipments that are less time dependent.
The company said the two new shipping options meant an expanded LTL service for its US customers, despite coming alongside the closure of 100 service centres and laying off of 1,700 staff during the planned consolidation, which was announced last September.
FedEx Freight spokesman Ken Van Guilder explained to Post&Parcel that the two levels of service was something it did not offer previously for LTL shipments, and was therefore an expanded service.
As well as the twin-speed service, a key selling point for the consolidated FedEx Freight offering is its added convenience, with the company acting to cut out paperwork and simplify the procedures for both its Priority and Economy options.
The new system means LTL shippers will be able to request either FedEx Freight service in a single phone call, dealing with a single sales representative and have a single invoice statement to cut down on paperwork.
The FedEx Freight services will also provide simplified FedEx Freight account numbers and will use a single vehicle for pick-up and delivery.
William J Logue, president and CEO of FedEx Freight, said: “Our streamlined network is engineered to deliver excellent service to customers, while allowing FedEx Freight to maximize existing capacity and support future growth.”
Consolidation
FedEx National LTL was originally born out of the $780m acquisition of Florida-based trucking company Watkins Motor Lines in September 2006. The acquired company boasted 140 service centres and more than 14,000 tractor-trailers. It generally provided more long-haul LTL shipments, while FedEx Freight operated LTL services on a more regional basis in North America.
Announced in September 2010, the consolidation of FedEx Freight and FedEx National LTL was projected to cost between $150 and $200 million in severance costs and lease terminations, but ultimately aimed to improve profitability through improved efficiencies and lower operating costs.
The program came after FedEx posted results in which its $1.26 billion FedEx Freight division turned a $2 million operating profit into a $16 million operating loss for the three months from June 1, compared to the same period in 2009.
Operating losses were driven in part by discounts offered to customers the previous year, which saw LTL daily shipments increase by 29% while yields declined 3%.
