5/8/23 Monday Parcel News Update

1. FedEx Freight Closing 29 Locations, Furloughing Employees

FedEx’s less-than-truckload (LTL) subsidiary, FedEx Freight, has announced plans to close 29 facilities and consolidate their operations into other locations, effective in August. According to the company, the decision comes after a network review to “ensure we have the right design to address changing market dynamics.”

Along with the facility closures, FedEx Freight will furlough certain job classes beginning May 28, with all expected to be reinstated on or before August 25.

The company cited declining volumes as a major cause of the decision to furlough.

Article from Jeff Berman, Logistics Management

2. UPS Opening 7 Healthcare Logistics Facilities

In UPS’ April 25 earnings call, CEO Carol Tomé shared plans to open 7 new healthcare-focused logistics facilities before the end of the year, saying their goal is to become the “number one complex healthcare logistics provider in the world.”

Healthcare logistics services are a point of success for UPS amid other volume-based struggles, as they expect to generate $10 billion in revenue from the healthcare sector this year. It’s become an appealing investment, as healthcare-focused shipments often have a higher per-shipment profit than business-to-consumer deliveries.

Article from Max Garland, Supply Chain Dive

3. Shopify Sells Logistics Business

After years of investing in their own logistics capabilities in order to better compete with Amazon’s full range of eCommerce services, Shopify announced the sale of their logistics assets to Flexport. The sale includes last-mile delivery provider Deliverr, which Shopify purchased for $2.1 billion in 2022.

The sale is another step in a deepened partnership with Flexport. In February, the companies announced a partnership that gives Shopify merchants access to a variety of Flexport’s services. According to Shopify President Harley Finkelstein, the company went on a “side quest” to develop their own logistics capabilities, but realized those services could be more effective if integrated with Flexport.

“This allows Flexport to do what they do best, and allows Shopify to go back to doing what we do best, which is building incredible software for e-commerce,” Finkelstein said.

Article from Annie Palmer, CNBC