I like PSR. I know a lot of you don’t. But I believe it to be a good concept that has had some faulty implementations.
So anyway, today’s Wall Street Journal reports that FedEx just told 1,400 LTL customers that the FedEx freight trucks won’t show up anymore. I’ve noticed a whole lot of FedEx trailers and containers on intermodal trains. They say their system is getting overwhelmed and they’ve jettisoned 1,400 customers to deal with that.
The report also says that FedEx is the largest LTL carrier in the US. I don’t know if they set out to be the largest LTL carrier, but apparently, they are.
I take this to mean that FedEx has somehow found themselves with a “side gig” of LTL, which is far different than their core business of parcel delivery. I know I’ve seen their trucks marked “Freight.”
Apparently it’s not making the money they had hoped it would.
Would this be comparable to railroads wanting to dump carload traffic?
I like PSR. I know a lot of you don’t. But I believe it to be a good concept that has had some faulty implementations.
So anyway, today’s Wall Street Journal reports that FedEx just told 1,400 LTL customers that the FedEx freight trucks won’t show up anymore. I’ve noticed a whole lot of FedEx trailers and containers on intermodal trains. They say their system is getting overwhelmed and they’ve jettisoned 1,400 customers to deal with that.
The report also says that FedEx is the largest LTL carrier in the US. I don’t know if they set out to be the largest LTL carrier, but apparently, they are.
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This post really got my attention. Admittedly, I have been retired since 2003. So , personally, just currently, an interested bystander, observer. I was amazed to read that Fed Ex was stated to be “…The Largest LTL carrier in the US…”. I would have bet the ranch, that it would be UPS. What had happened to change that? Had been no merger of the two companies(?) The major differences ‘had been’ UPS was unionized and FedEX wasn’t… UPS was covered under the National Labor Relations Act, and FedExX was covered by the Rail
LTL is great as it involves a much more substantial “competitive moat” than TL does. Anyone can get into the TL business… all you need is a truck and a driver and a subscription to Loadlink. LTL on the other hand requires a terminal network, and the ability to service a large area is part of what sets one carrier apart from another. I’m surprised to hear this about Fedex… I’ve used them with good results… even used them for LTL into the Northwest Territories.
Package delivery is express, not LTL. Different operating model and charge structure entirely. A sort of intermediate example is food delivery to chain restaurants… and the kind of staff and equipment to optimize that.
I originally ‘made my bones’ with Dave Quesnel of CF by discussing modular dunnage for more rapid LTL operation, to give some of the practical effect of internal containerization without the high fixed costs. It’s a very different thing from giving a bunch of subcontracted people the keys to a van full of parcels and a touchscreen route computer.
Incidentally – as we are apparently being carefully watched for any non-railroad thread diversion – there have been interesting proposals over the years for rail ‘LTL’ (including less-than-container loads out of containers) using some expedited service (often involving self-propelled equipment very reminiscent of Kneiling’s). These can be unexpectedly attractive where “PSR” just-in-time delivery and pickup can be reliably guaranteed to shippers.
Express and Freight are two entirely separate operations. Freight came out of the original American Freightways of Harrison, AR (not Razorback) and Watkins Motor out of Lakeland, FL. UPS bought Overnite but is in the process of selling them to a Canadian trucking conglomerate at a large loss. UPS is the largest “trucking company” but that is mostly their parcel business.
Wouldn’t be surprised if the customers they pruned was cheap freight anyhow. Keep you’re top acounts dump the lowballers… That’s what you do when capacity runs tight.
The one customer mentioned, Sports South ships the great majority of their product via Ground/Express. They are one of the top 5 largest shooting distributors.
OK, I’ve got to respond to these. Way back many years ago when I got out of the US Army, I chose to go to Northwestern University to get a Master of Science degree in transportation. (I did get financial aid; I could never have afforded NU on my own.)
I had to research and write a master’s thesis. I researched and wrote “The Transportation of LCL/LTL Freight by Railroad.” My thesis advisor said I had to explain why this freight diverted to truck. I spent a summer working on an LTL freight dock and I spent many days and nights in the Transportation Library. There was no Internet back then. You found books and publications, read them, and took notes. I do know about this stuff.
The railroads “dumped” LCL because the idiot government economic regulators would not let them cover their
I like PSR. I know a lot of you don’t. But I believe it to be a good concept that has had some faulty implementations.
So anyway, today’s Wall Street Journal reports that FedEx just told 1,400 LTL customers that the FedEx freight trucks won’t show up anymore. I’ve noticed a wh