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.
What kinds of customers are the 1400? Any names that we would recognize?
Never too old to have a happy childhood!
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?
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
tree68I 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?
Remember, back in the foggy mists of time, the railroads dumped LCL traffic - Less than Car Load traffic.
LCL traffic fell dramatically when the railroads started charging for pickup and delivery.
[quote user="greyhounds"]
So then why does Schnieder Intermodal have a whole section of their intermodal pages setup for LTL? I guess I miss what is so bad about it?
Might those 1,400 be slow-pay LTL customers? The Press is prone to shoehorn "reality" into the picture It wants to frame.
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.
Isn't package delivery the ultimate of LTL service? One package does not a truck load make!
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.
Just a few points...
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.
BackshopJust a few points... 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.
As I recall, UPS bought Overnite from Union Pacific's holding company.
Here's the link:
https://www.freightwaves.com/news/fedex-freight-prunes-1400-customers-to-protect-service-levels
greyhoundsHere's the link: https://www.freightwaves.com/news/fedex-freight-prunes-1400-customers-to-protect-service-levels
Doesn't sound like PSR - it sounds like a White Flag surrender.
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.
Backshop Just a few points... 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.
Is this like Southwest Airlines Ground?
Southwest Airlines Now Taking Passengers To Destinations By Shuttle Bus (theonion.com)
If GM "killed the electric car", what am I doing standing next to an EV-1, a half a block from the WSOR tracks?
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.
BaltACDRemember, back in the foggy mists of time, the railroads dumped LCL traffic - Less than Car Load traffic.
CSSHEGEWISCHLCL traffic fell dramatically when the railroads started charging for pickup and delivery.
1) The railroads “dumped” LCL because the idiot government economic regulators would not let them cover their costs of handling such freight. The fool regulators blocked intermodal development and would not allow freight rates to cover the costs of carload movement. What would you do?
2) The railroads were “ordered” to charge for pick up and delivery. The idiot government economic regulators allowed truckers to provide the service but restricted the railroads from doing so. Guess which one got the freight.
greyhounds 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.
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding I can't see how this relates to PSR. FedEx has too much business to handle right now, so they are prunning back the business that takes the most work and puts the least on the bottom line. It's nothing new and it's not unique to transportation. In my industry- building materials- every manufacturer right now is doing similar things to their customers and their product lines. If you are a small-potatos buyer, right now the chances are you are a no-potatos buyer. If you want shingles, the manufacturers are cutting out production of all of the slow moving products to concentrate on making more of the fastest moving products in the 4 or 5 popular colors. Take it or leave it. What the article didn't mention, and what every other FedEx customer can see coming like a freight train, is price increases. Take it or leave it. They just left 1400 customers, so the remaining ones know where they stand.
That's PSR in a nutshell.
The difference is that the railroads park locomotives and lay off employees so that they can't haul anymore. FDX is running full bore and doesn't have the equipment or employees to handle more freight.
That right there is the entire OTR industry right now. We are so freaking stretched out capacity wise at my work that it isn't funny. Right now everything that can run is literally on the freaking road for us. The supply chain has been busted due to the freaking pandemic restrictions and now that everything is reopening well let's just say there's not enough product to meet the demand. What's killing us is one thing the backlog of shipping coming into the USA. Then when a needed product gets into this nation it's a freaking madhouse to get it distributed as fast as possible to where it needs to go. Then throw in all the ransomware attacks the shortage of certain items and your going to be short capacity as you're equipment is tied up waiting for stuff. Just in time supplies became just not there right now.
Murphy Siding greyhounds 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. greyhounds 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 can't see how this relates to PSR. FedEx has too much business to handle right now, so they are prunning back the business that takes the most work and puts the least on the bottom line. It's nothing new and it's not unique to transportation. In my industry- building materials- every manufacturer right now is doing similar things to their customers and their product lines. If you are a small-potatos buyer, right now the chances are you are a no-potatos buyer. If you want shingles, the manufacturers are cutting out production of all of the slow moving products to concentrate on making more of the fastest moving products in the 4 or 5 popular colors. Take it or leave it. What the article didn't mention, and what every other FedEx customer can see coming like a freight train, is price increases. Take it or leave it. They just left 1400 customers, so the remaining ones know where they stand.
I can't see how this relates to PSR. FedEx has too much business to handle right now, so they are prunning back the business that takes the most work and puts the least on the bottom line. It's nothing new and it's not unique to transportation. In my industry- building materials- every manufacturer right now is doing similar things to their customers and their product lines. If you are a small-potatos buyer, right now the chances are you are a no-potatos buyer. If you want shingles, the manufacturers are cutting out production of all of the slow moving products to concentrate on making more of the fastest moving products in the 4 or 5 popular colors. Take it or leave it. What the article didn't mention, and what every other FedEx customer can see coming like a freight train, is price increases. Take it or leave it. They just left 1400 customers, so the remaining ones know where they stand.
A great recipe for creating a competitor instead of (as Peter Drucker advocated) creating a customer. It sure is tempting to kick the little guys to the curb in times like this... but things can change alot quickly.. in six months they may very well wish they'd done more to keep them. Every new business that comes along to pick up what's been jettisoned is a vote against the incumbant and the status quo...
Ulrich Murphy Siding greyhounds 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 can't see how this relates to PSR. FedEx has too much business to handle right now, so they are prunning back the business that takes the most work and puts the least on the bottom line. It's nothing new and it's not unique to transportation. In my industry- building materials- every manufacturer right now is doing similar things to their customers and their product lines. If you are a small-potatos buyer, right now the chances are you are a no-potatos buyer. If you want shingles, the manufacturers are cutting out production of all of the slow moving products to concentrate on making more of the fastest moving products in the 4 or 5 popular colors. Take it or leave it. What the article didn't mention, and what every other FedEx customer can see coming like a freight train, is price increases. Take it or leave it. They just left 1400 customers, so the remaining ones know where they stand. A great recipe for creating a competitor instead of (as Peter Drucker advocated) creating a customer. It sure is tempting to kick the little guys to the curb in times like this... but things can change alot quickly.. in six months they may very well wish they'd done more to keep them. Every new business that comes along to pick up what's been jettisoned is a vote against the incumbant and the status quo...
Murphy Siding greyhounds 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 can't see how this relates to PSR. FedEx has too much business to handle right now, so they are prunning back the business that takes the most work and puts the least on the bottom line. It's nothing new and it's not unique to transportation. In my industry- building materials- every manufacturer right now is doing similar things to their customers and their product lines. If you are a small-potatos buyer, right now the chances are you are a no-potatos buyer. If you want shingles, the manufacturers are cutting out production of all of the slow moving products to concentrate on making more of the fastest moving products in the 4 or 5 popular colors. Take it or leave it. What the article didn't mention, and what every other FedEx customer can see coming like a freight train, is price increases. Take it or leave it. They just left 1400 customers, so the remaining ones know where they stand.
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.
No one here has ever accused top management of being 'brainiacs'.
I look at the people who think that certain college educations are better than real world experience and go really. I work for a company where the boss literally started sweeping the floor and worked his way up that was his wish. Yes he's got his MBA however he knows this business inside and out.
My hubby had one super complete with a Harvard business school diploma that thought a solo driver could make it from Ontario California to Aurora Illinois in 10 hours. This person was made the senior vice president of his company. Why did he get the job simple he was banging the owners daughter and got her pregnant.
The obvious differences between LTL and TL are covered above. I worked for 10 years in Traffic Dept (pricing) for an LTL carrier - 1980-1990 and was glad to leave. It was a mess then as carriers kept expanding territory and capacity never stabilized...only grew while volumes were level or slow grow.
FedEx Freight simply cannot handle their volumes at this time. 1400 customers sounds like quite a bit, but that is 30 per state. They probably jetisoned the customers which either had non compensated rates or lower volumes, or difficult freight to handle (non palletized, or residential deliveries). FedEx Parcel is also having difficulties. My guess is that their business model - using contractors rather than unionized employees left them standing at the alter alone when the economy started roaring back and the potential employees could stay at home and earn $$$ thru COVID. That will soon change.
Just to keep this on the tracks (and legal with the mods), while the rails lost LCL, they still handle considerable LTL - check out the TOFC trains and see the ABF, Yellow, UPS Freight, etc.
Supply chain issues will be a huge factor for months. The south China port (location skips me now) is experiencing big issues with COVID.
Home Depot just chartered their own container ship...what does that tell you?Ed
I started out in LTL as well, and spent some time in the pricing department.. back before computers were in every office. We had giant rates tomes on our desks.. class rates.. and special rates for each commodity.. some customers got special consideration for dimensional freight etc.. discount tables etc.. Not surprisingly, rates disputes resolution was also a big part of it. The older heads seemed to be geniuses.. they had the complex tables and each customer's peculiarites committed to memory.. And then the computers came and changed everything. Rates clerks were brought down a few notches just as dispatchers were when GPS came in.
Getting back to railroads, here in Canada they haul most of the longer distance LTL freight.. a freight forwarder (Manitoulin, TransX, Maritime-Ontario etc) picks it up and consolidates loads in containers which are then dropped off at CN or CP for furtherance to destination terminal where the proces of destuffing and last mile takes place.. once again by a third party forwarder. So the good news is that the rails are still handling it.. the bad news is the the money is in the part the freight forwarder does..
UlrichI started out in LTL as well, and spent some time in the pricing department.. back before computers were in every office. We had giant rates tomes on our desks.. class rates.. and special rates for each commodity.. some customers got special consideration for dimensional freight etc.. discount tables etc.. Not surprisingly, rates disputes resolution was also a big part of it. The older heads seemed to be geniuses.. they had the complex tables and each customer's peculiarites committed to memory.. And then the computers came and changed everything. Rates clerks were brought down a few notches just as dispatchers were when GPS came in.
Times have changed. My dad worked for the MoPac back in the depression as a Chief Clerk in off line offices so as railroads do, he got moved. I was born in Indianapolis, we then moved to Chicago, Milwaukee, and then Cincinnati. In 1947, the MoPac told him they were relocating him again. He said NO, you are not and went to work for a truck line based in Cincinnati. He had been working with tariffs and had become licensed to practice before the ICC. And to get business, there had to be a tariff. And there were many factors used in dete,rmining what the tariff covered. How fragile was the shipment, volume, weight value, distance, etc. And what was the competition. And if XYZ trucking or the railroad had a tariff for the shipment, and a certificate to operate between the origin and destination, it could handle it. And had to as a common carrier. I am not sure if I had products to ship today, whether there are tariffs or how freight rates are set. Does a shipper have to ask for a quote to ship their tons of product and are there published rates. Back in my dads day, if you had a siding, the railroad would have to provide the car, take it and hand it off to a connecting railroad (if required) and share the rate with other carriers to its destination.
Dad also wrote about seven articles for Trains back in the forties, one of which described how the railroads matched passenger fares. It described how if you wanted or needed to go somewhere, for the same amount of money you could go multiple routes. For example, if you wanted to go between Chicago and Los Angeles, the fare would be the same whether you went via the UP, the ATSF, the RI, or any other route that connected those points and if you went round trip, it would be the same fare if you went via Seattle and many more options.
Since the OTR industry was deregulated decades ago most rates are 1 either contracts were the carrier and customer agree that we being the carrier will charge them so much per mile plus a fuel surcharge if fuel gets above a certain amount and tolls if needed to get the product delivered. Now this does not apply to spot rates when you need a product moved in a hurry. Those are whatever you can get a truck to move the load for. Then you have the broker's who's sole job is to keep as much of the money from you the carrier as possible to make them more money. CH Robinson has the nickname of Cheap and Heavy for a reason. They're always trying to get you at full gross with half fuel tanks and barely paying enough to cover your costs.
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