Difficulties Mount For FedEx and UPS, With Little Relief in Sight

For legacy parcel giants FedEx and UPS, current difficulties — including a fraught labor market, falling volumes, and a harsh parcel forecast— are mounting, with the summer months promising little in the way of relief. But despite this, it’s not all doom and gloom in the transportation industry: Walmart and Amazon are bringing renewed competition to the last mile, and Chick-fil-A is bringing not just chicken but jobs to the people of Olathe, Kan. For transportation industry professionals looking for the bigger picture, we’ve rounded up the nine supply chain headlines you need to know. 

‘Substandard Pilot Contract is not a Path to Success’

In an opinion piece published by Supply Chain Dive, Capt. Chris Norman, chair of the Air Line Pilots Association’s FedEx group, made clear his frustration with FedEx as bargaining between the parcel carrier and its pilots continues. 

“‘People, Service, Profit’ is the philosophy that built our brand, and it is still the way forward today,” Norman wrote. “Now is the time for FedEx to stop playing short-sighted, value-destroying games and complete an agreement that truly positions it to compete.”

Further Cuts Expected for FedEx Express, According to CEO 

As FedEx continues to restructure in response to plummeting parcel demands, the parcel carrier is making further cuts to Express services, according to reporting from Supply Chain Dive. The reductions follow those instituted last quarter, which saw flight hours reduced by 8% and benefits and salary expenses reduced by 4%. As a result of these cuts to Express, FedEx mitigated 45% of total revenue declines, FedEx CEO and President Raj Subramaniam said during a Mar. 16 earnings call

Despite Heightened Tensions, Expert Predicts End to UPS, Teamster Negotiations By June 30

Despite a continued escalation of tensions between UPS and the Teamsters, a leading parcel industry consultant predicts that negotiations will end before June 30, well ahead of the July 31 deadline. 

The consultant, Satish Jindel, president of Ship Matrix, a logistical consulting and analytics firm, said his views are based on years of industry experience and having experienced many contract cycles, according to reporting from FreightWaves

Amazon Partners with Rite-Aid to Offer Two-Hour Delivery to Prime Members

As e-commerce companies compete to provide ever-faster delivery times, Amazon is partnering with Rite-Aid, a drugstore chain with over 2000 locations in the United States, to offer two-hour delivery service to select ZIP codes in Newark, N.J., and Burbank, Calif.

 According to Supply Chain Dive, the service will be available to Amazon Prime members, allowing customers fast access to health and beauty items and grocery items. 

Following Breakdown in Talks, Teamsters Reject Yellow Corp. COO Proposal

Following a breakdown in talks between less-than-truckload carrier Yellow Corp. and the International Brotherhood of Teamsters, the Teamsters have announced their rejection of a proposed change of operations (COO) brought to the table by Yellow Corp. 

According to reporting from FreightWaves, the Teamsters have said that Yellow’s proposed change of operations would affect the union’s bargaining abilities and violate key components of the Teamster's constitution. 

Walmart Significantly Expands Last-Mile Delivery Platform

Walmart has expanded the number of pickup points available to customers of its Spark Driver delivery platform, which partners with contracted drivers to provide last-mile delivery services on behalf of the retailer. 

According to reporting from Supply Chain Dive, “The Spark Driver platform now covers 15,000 pickup points, which include Walmart store locations and Walmart GoLocal client retail locations it delivers from.” This represents a significant increase in service range, tripling the number of pickup points. 

Knight-Swift Acquires U.S. Xpress in High-Dollar Deal

Knight-Swift Transportation, which saw approximately $4.5B in revenue in 2022, is purchasing U.S. Xpress as yet another addition to an already exciting time for mergers and acquisitions in the transportation industry. 

The deal between LTL freight carrier Knight-Swift, based in Phoenix, AZ, and U.S. Xpress, based in Chattanooga, TN, is currently valued at $808M, according to reporting from Logistics Management

Chick-fil-A to Invest $31M Kansas City Distribution Center

Chick-fil-A has announced plans to open a roughly 148,000 sq. ft. distribution center in Kansas City, according to Supply Chain Dive

The distribution center, the restaurant chain’s fifth, bring more than 60 jobs to the surrounding community of Olathe, KA. The facility is set to begin operating at full scale in the first half of 2024. 

With Legacy Carriers Struggling, Shippers Turn to Intelligent Audit for Tech-Empowered Resiliency in Parcel Operations 

As UPS and FedEx navigate labor difficulties and plummeting volumes, parcel shippers are right to be feeling the heat. For nervous shippers, Intelligent Audit provides parcel shippers with a vital toolkit of transportation software. 

  • Freight Audit and Recovery ensures shippers get the most out of their bottom line.
  • Business Intelligence helps shippers streamline complex parcel operations.
  • Secure Carrier Payments take the stress out of supply chain collaboration. 

Get started with Intelligent Audit today, and see how 25 years on the cutting edge of parcel transportation can transform your business.

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