FedEx advises UPS shippers to board now

FedEx warns UPS shippers that time is running out for change.  (Photo: Jim Allen/FreightWaves)

FedEx warns UPS shippers that time is running out for change. (Photo: Jim Allen/FreightWaves)

FedEx Corp. advised shippers on Thursday that they should start shipping now with the company if they fear service disruptions resulting from a potential August 1 Teamsters union strike from UPS Inc.

In a statement Thursday, FedEx (NYSE: FDX) said the company’s priority was to “protect capacity and service for existing customers”. Customers who are considering transferring volumes to FedEx, or who are currently in discussions with the company to open a new account, are “encouraged to start shipping with FedEx now,” the statement said.

FedEx said that while it has had productive discussions with UPS (NYSE:UPS) customers, it has yet to see a tangible increase in business due to shippers’ uncertainty about the situation. .

On Wednesday, UPS and the Teamsters broke off negotiations over a new master contract, with each side blaming the other for the rift. There are no new discussions planned. The Teamsters have threatened to strike if a contract isn’t in hand by Aug. 1, the day after the current contract expires.

In an email Thursday to the company’s global sales and pricing teams, FedEx said pricing offers with large customers must be signed by July 17 or the offer will be withdrawn. The company will honor its commitments to large customers who plan to embark after July 17.

The company will attract new small and medium-sized customers as it assesses network capacity. Third parties are expected to change their operations immediately, as the volume shipped during the week of July 17-21 will determine the capacity allocated to them, FedEx said.

Separately, Mike Parra, CEO of the Americas for DHL Express, the international air express unit of DHL, said on Thursday that his company had not benefited from shippers’ concern over a strike. Parra also told FreightWaves at an event in Atlanta that he didn’t want to see a strike and that a work stoppage would lead to a “total disruption” of the US economy.

“There is not a single company on the planet that can handle 24 million shipments per day handled by UPS,” Parra said, referring to total daily UPS volumes mentioned in some publications. A work stoppage would also “impact our employees, and that’s not a good thing,” Parra said.

“That’s not the way to win business,” Parra said of the back and forth. “You want to win the business the right way.”

Parra was at DHL in 1997 when the Teamsters hit UPS for 15 days. “It was awful,” he said. “We were overwhelmed with volume, and on day 16, all of this business returned to UPS. It has had an impact on our loyal customers who have been there with us,” he said.

The message that FedEx advises UPS shippers to board has now appeared first on FreightWaves.

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