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While the labor negotiations between the Air Line Pilots Association and FedEx Express have been contentious since they first began, recent breakdowns have left the union closer than ever to a potential strike. The ALPA has recently requested to be released from mediation, a clear indication that the union hopes to proceed with labor action soon. With FedEx Express’s ability to deliver shipments in the near future in question, experts throughout the supply chain are wondering what impact a strike might have on the struggling parcel sector.
Beyond FedEx Express, other key parcel players are facing headwinds. Deutsche Post, the parent company of parcel giant DHL, is warning investors that earnings may remain flat in the first half of 2024. Here are the headlines you need to know in an industry that's always moving.
The Air Line Pilots Association, which represents FedEx Express’s roughly 5,800 pilots, has requested that the National Mediation Board officially release the union from further mediation. The union intends to go on new strikes against the carrier. The request follows a breakdown in negotiations with FedEx Express over retirement, pay, and quality of life.
“While ALPA has been generous in our movement on positions, FedEx’s incremental movement on some items and refusal to accept many of ALPA’s items indicate an unwillingness to ever reach an agreement,” Captain Christopher Comer and First Officer Jose Gomez, local FedEx union leaders, said in a letter to fellow pilots obtained by FreightWaves.
Deutsche Post, the parent company of international parcel transportation provider DHL, has recently warned investors that earnings may remain relatively flat through the first half of 2024 as a weak parcel market impacts the company’s bottom line. Deutsche Post leadership attributes this stagnation largely to persistent economic issues facing the parcel sector and the broader global economy. The announcement from Deutsche Post resulted in significant pessimism on the part of investors, which resulted in a 6.3% drop in share value to $39.07 euros on March 6.
“The year 2023 was characterized by a weak global economy and, above all, weak global trade. Major uncertainty factors such as volatility in demand and geopolitical crises will remain with us in 2024,” Chief Executive Tobias Meyer said in a quote obtained by the Wall Street Journal (subscription required).
The U.S. Securities and Exchange Commission (SEC) recently approved a rule that would compel some public companies to disclose greenhouse gas emissions and other climate-related risks. The SEC’s approval follows significant pushback from companies and industry leaders, who feel that quantifying complex Scope 3 emissions places too great of a burden upon companies.
“While it appears that some of the most onerous provisions have been removed, this remains a novel and complicated rule that will likely have a significant impact on businesses and their investors,” said Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s capital-markets group, according to reporting from the Associated Press.
The Intermodal Association of North America (IANA) recently released a statement expressing strong support for a resolution to repeal a Department of Labor ruling that would reclassify many independent contractors in the supply chain industry as full employees. The statement supports a congressional movement to issue a joint “resolution of disapproval” against the Department of Labor’s ruling.
“For decades, more than 80 percent of intermodal drivers have chosen to carry out this important work as independent contractors. DOL’s recent rulemaking threatens to eliminate their freedom of choice and the opportunity to invest in and operate their own businesses,” according to the IANA statement. “Without Congressional action, the DOL’s new regulations will negatively impact the nation’s supply chain by deterring qualified drivers from the industry and worsening existing driver shortages, which will ultimately slow the movement of goods and increase costs for consumers.”
BNSF Railway, the nation’s largest railroad, has reportedly furloughed hundreds of workers across its operational base, including Kansas, Montana, Nebraska, and Texas workers. The furloughs, announced Feb. 27, affect more than 350 workers.
“BNSF Railway callously announced it has furloughed over 362 mechanical department positions at numerous locations across their system,” Greg Regan, president of the TTD AFL-CIO, said in a letter obtained by FreightWaves. “BNSF has said that the slashing of these positions was necessary to realign with their business operations and to respond to business decline.”
Major carriers are seeing significant increases in LTL volumes compared to a year ago. Experts attributed the increase to last year’s closure of LTL giant Yellow, which sent a flood of volume into the broader freight market as shippers looked to reallocate shipments.
The increase in volume can be partially attributed to Saia and XPO’s recent operational expansion, with each carrier acquiring 28 of Yellow’s recently shuttered terminals, according to the Journal of Commerce (subscription required).
A recent investigation by the House Committee on Homeland Security found that some Chinese-made cranes currently in use at U.S. ports and logistics hubs contain communication equipment with no record of installation or obvious purpose. The cranes, manufactured by the Chinese company ZPMC, were found to include previously undiscovered cellular modems.
“Our Committees’ investigation found vulnerabilities in cranes at U.S. ports that could allow the CCP [Chinese Communist Party] to not only undercut trade competitors through espionage but disrupt supply chains and the movement of cargo, devastating our nation’s economy,” Rep. Mark Green, the Republican chair of the House Homeland Security Committee, said in a statement to CNN.
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