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After wide-reaching layoffs in recent weeks, logistics experts are questioning FedEx’s “purple promise.” With FedEx struggling, UPS is bolstering innovative distribution strategies for the booming e-commerce sector. But as UPS faces labor troubles of its own, the future remains uncertain for these legacy parcel giants. Here are ten headlines you need to know in an industry that's always moving.
As FedEx continues reducing services and cutting costs in the face of falling parcel demands, the carrier has announced plans to use FedEx Express to handle FedEx Ground shipments and deliveries in Hawaii. According to reporting from Supply Chain Dive, the transition from FedEx Ground to FedEx Express will happen well before peak season.
More than a year after the FedEx Express and Air Line Pilots Association, International (ALPA) became eligible for Federal mediation in November 2021, the Pilots union and FedEx Express are reporting significant progress on negotiations. “In our case, when we entered expedited mediation, we had per diem, duration, pay, and retirement,” First Officer Brian Baldwin said in a quote obtained by Supply Chain Dive, “As of this recording, we’re down to just pay and duration.”
The FedEx promise, “I will make every FedEx experience outstanding,” has long been a guiding star for FedEx employees. However, as mass layoffs shake employee and customer faith at the parcel giant, logistics experts are asking, ‘has FedEx broken the purple promise?’
Mark Solomon, writing in FreightWaves, says only time will tell: “The most important question is to what extent FedEx, in its effort to trim fat, has cut into bone. Roles and teams are being changed. Groups are being consolidated,” Solomon wrote. “Will the push for efficiency disrupt service quality and reliability? Will remaining employees be too worried and distracted to do their jobs optimally? Will rivals seek to capitalize on any internal turmoil in the wake of the cutbacks? The answers will reveal themselves in due course.”
In a Feb. 2 announcement, retailer Gap announced a new partnership with Ware2Go, a UPS company. “This collaboration between Ware2Go and GPS Platform Services is the next chapter in the longstanding relationship between Gap Inc. and UPS. We have a deep shared history and decades-long partnership anchored in customer focus and commitment to innovation,” said Kevin Kuntz, Head of Global Logistics Fulfillment at Gap Inc.
Through their collaboration with Ware2Go, Gap plans to improve omnichannel fulfillment strategies through additional investments in speed, automation, and efficiency, according to reporting from Supply Chain Dive.
To provide service to Amazon sellers, mega-carrier UPS is expanding the service footprint of its Ware2Go subsidiary. “We’ve proven that our 1- to 2-day delivery model works, but we saw a need in the market for more optionality,” said Ware2Go CEO Steve Denton in a Feb. 7 announcement, “Consumers care about sustainability, reliability, visibility, personalization, and speed. We’ve brought together all of those features under a single network and technology platform to enable our merchants to meet the expectations of all of their customers.”
As Ware2Go expands, the company plans on bolstering its workforce with customer service employees from Whitebox, an e-commerce platform, according to reporting from Supply Chain Dive.
As volumes continue to fall throughout the transportation industry, carriers are beginning to see the consequences. Yellow, a leading provider of overland freight solutions, saw tonnage fall 25% YoY in Q1, according to reporting from FreightWaves.
“We continue to prioritize yield,” Yellow CEO Darren Hawkins said. “We’re finding the yield equation across LTL to be strong, and certainly to cover the inflationary cost, we’ll continue to prioritize that.”
Following the reporting of significant declines in Q4 LTL tonnage, transportation services provider Forward Air saw considerable drops in shares on Feb. 2. According to reporting from FreightWaves, “Weight per shipment dropped 12% in the quarter, worse than the company and its customers had anticipated. Year-on-year tonnage figures also declined each month in the quarter by double-digit levels.”
Following the steep decline in overall tonnage, Forward Air saw shares trading down 15% on Feb. 2nd.
According to a report from Cargo Net, a provider of cargo theft solutions, the final months of 2022 saw a significant increase in cargo theft, resulting in an overall annual loss of $223 Million to cargo theft over 1,178 reported events.
“When we look at the hot spots in general for cargo theft, they tend to be port areas,” said Travelers crime and theft specialist Scott Cornell in conversation with FreightWaves, “If you look at the heat map that CargoNet puts out, you’ll see California is always No. 1. California definitely has several ports in that state, then Florida, another port state, Texas, Georgia, New Jersey, Illinois, that’s really considered an inland port because of the rail yards, same thing for Memphis, almost sort of an inland port because of the rail yards.”
As shoppers search for a reprieve from ongoing inflation, a persistent strain of avian flu keeps egg prices high at supermarkets nationwide. However, some customers and politicians remain skeptical, accusing food providers of using price-gouging tactics.
“Consumers are used to seeing some volatility in the egg pricing market, but the current price spike in the industry’s favor warrants careful scrutiny,” said Senator Jack Reed in a Jan. 24 press release, “Independent federal watchdogs should look at the facts and follow the evidence to ensure consumers are treated fairly.”
As major consumer packaged goods manufacturers work to convey sustainability in their operations, environmental experts and activists are questioning their motivations. According to Supply Chain Dive, major companies like Mars, Nestle, and PepsiCo told affiliate publication Food Dive that they had taken significant strides toward zero-emissions goals in recent years. However, Jim Walsh, policy director for the environmental group Food & Water Watch, expressed his skepticism: “This is big agriculture really engaging in a marketing campaign to greenwash a destructive global food system,” Walsh told Supply Chain Dive.
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