There's Always Leverage!
 

FedEx advises UPS shippers to get on board now

FedEx Corp. advised shippers on Thursday that they should begin shipping now with the company if they are concerned about service disruptions arising from a possible Teamsters union strike Aug. 1 of UPS Inc.

In a communique Thursday, FedEx (NYSE: FDX) said that the company’s priority is “protecting capacity and service for existing customers.” Customers considering shifting volumes to FedEx, or currently in discussions with the company to open a new account, are “encouraged to begin shipping with FedEx now,” the communique said.

FedEx has said that while it has held productive discussions with UPS (NYSE: UPS) customers, it has yet to see any tangible bump in business as a result of shipper uncertainty over the situation.

On Wednesday, UPS and the Teamsters broke off negotiations over a new master contract, with each side blaming the other for the breakdown. There are no new talks scheduled. The Teamsters have threatened to strike if a contract is not in hand by Aug.1, the day after the current contract expires.

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teams, FedEx said that pricing offers with large customers must be signed on or before July 17 or the offer will be withdrawn.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

The company will bring on new small to midsize customers as it assesses network capacity. Third parties should shift business immediately as volume shipped during the week of July 17-21 will determine how much capacity will be allocated to them, FedEx said.

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

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

“This is not the way to earn business,” Parra said about the back and forth. “You want to earn the business the right way.”

Parra was at DHL in 1997 when the Teamsters struck UPS for 15 days. “It was horrific,” he said. “We got flooded with volume, and on Day 16 all of that business went back to UPS. It impacted our loyal customers that have been there with us,” he said.

The post FedEx advises UPS shippers to get on board now appeared first on FreightWaves.

FedEx Urges Customer Action, Focused on Protecting Existing Customer Capacity and Service in Current Environment

July 06, 2023 08:00 AM

In the event of an industry disruption, FedEx Corporation’s (NYSE: FDX) priority is protecting capacity and service for existing customers. Therefore, shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now.

Why Choose FedEx?

Focused on making supply chains smarter for everyone, FedEx is flexible, efficient, and intelligent, offering an unmatched bundle of parcel and freight services, visibility solutions like Picture Proof of Delivery and FedEx Delivery Manager, and the transportation industry’s only loyalty program – MyFedExRewards. Customers can enjoy peace of mind using a network that ships to more than 220 countries and territories around the world, and ground service that is faster to more locations than UPS Ground.

How?

Over the past several months, FedEx has engaged in productive conversations with many potential customers who want to leverage the global scale of the FedEx network and our extremely compelling value proposition. In the spirit of business and service continuity, we encourage them to take action now. For small and medium businesses, setting up an account is easy – learn more here.

Our Union leadership and the ship of fools talking this BulS#@#$ about leverage being just flying your line is such weak sauce. What you posted above is real damn leverage. They're all frightened about what will happen so much so that they will do anything to avoid the confrontation. Stating publicly that we have no leverage.

Like I said several times before this is the weakest, most compliant, and complacent pilot group i have seen in more than 30 years in this business.

This could have been more leverage had the NC and MEC not accepted below industry pay rates in May. All because they couldn’t wait to share the new retirement.

That’s why they want this signed before August! It’s a strategic move. They can’t promise good service with labor issues with the crew force. Just like they couldn’t purchase TNT in 2015 until we signed that POS. Our union is once again getting played.

Once again😂??? How about every time…NO NOW!!!

unfortunately UPS’s situation and ours are two completely different situations. It’s interesting that you don’t understand the difference.

Corporations exist to increase shareholder wealth via maximum profit.

Profit = Revenue - Cost

The equation above has two variables. We operate in a competitive market, where customers have choices, and our collective efforts/actions affect both variables. Fedex & UPS management both understand this. It's your choice/our choice to understand it as well.

In Transparency, Integrity and Unity (for Everyone),
DLax

Looming UPS Strike Spurs Some Companies to Rethink Supply Chains

Jordyn Holman and J. Edward Moreno
Sat, July 8, 2023 at 10:16 AM EDT
5 min readKathryn Keeler and her husband, Stuart de Haaff, own an olive oil company in the hills of central California. The couple spend their days harvesting olives, bottling the oil, labeling the glass bottles and shipping them out, relying primarily on UPS to get their product to kitchens throughout the United States.

They are far from alone. UPS handles about one-fourth of packages shipped each day in the United States, according to the Pitney Bowes Parcel Shipping Index, many of them for small businesses like Keeler’s company, Rancho Azuly Oro.

But with the labor contract between UPS and 325,000 of its workers expiring at the end of the month and a potential strike looming, business owners around the country are facing what could be the latest in a series of supply chain disruptions that they have confronted since the start of the pandemic.

Some are preemptively turning to FedEx, the next largest private carrier in the United States, or the U.S. Postal Service. Others are calling their third-party shippers — firms that work with the likes of UPS, FedEx and DHL to handle their clients’ shipping needs — to ensure that their packages can still get to their final destinations even if there is a strike.

The logistical challenge is just one more burden on businesses that have been stretched thin over the past few years.

“Maybe a larger business can withstand those types of situations,” Keeler said. But as small-business owners, she and her husband “don’t have a lot of extra time in our day to be on the phone with the post office or FedEx.”

Since 2020, the pandemic has strained the global supply chain in a number of ways. E-commerce reached record levels as stuck-at-home Americans bought clothes, furniture, workout equipment and groceries online. Companies had to navigate COVID-related shutdowns at factories in China and Vietnam. There were worldwide delays when a large container ship got stuck in the Suez Canal, leading to containers piling up at the Port of Los Angeles. Those situations affected the way goods came into the United States.

A UPS strike could hobble the way brands move their wares domestically.

“This is something that affects us on our home turf, and how do we solve for that?” said Ron Robinson, the CEO of BeautyStat Cosmetics, which uses UPS to ship its skin care products to retailers such as Ulta and Macy’s.

One strategy that his team will lean on is trying to bundle packages, sending as many as it can out at once, he said.

Switching to another carrier is going to cost some companies.

Ryan Culver, the CEO of Platterful, a monthly charcuterie board subscription service, also uses UPS. Switching over to FedEx Express — necessary to ensure the meats in his packages reach consumers in time — would cost about $5 to $10 more per delivery.

Teri Johnson, the founder of Harlem Candle Co., received an email June 26 from her third-party shipper about a potential UPS strike. It suggested she switch to FedEx. That will cost her about $2 extra for each candle shipped in the greater New York area. Sending her candles to California will cost even more.

“We don’t really have a choice right now,” Johnson said.

FedEx said it was accepting additional volume for a limited time and would assess how much capacity its network could accommodate. “Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now,” the company said in a post on its website Thursday.

The Postal Service said in an emailed statement that it “has a strong network, and we have the capacity to deliver what is tendered to us.”

Larger companies are relying on sophisticated backup plans that have been tested over the past few years. The pandemic and previous tariff trade wars pushed many major retailers with global supply chains to diversify the countries where their vendors are and the parcel carriers they use.

“We’ve been focused on investing in a lot of transportation solutions that allow us to more nimbly move freight between carriers,” said Alexis DePree, the chief supply chain officer at Nordstrom. “We can do that with a lot more flexibility and speed than we were able to in the past.”

Some third-party carriers are seeing a boost in their businesses as the possibility of a UPS strike comes into focus for their clients. Stord, a third-party logistics and technology provider based in Atlanta whose clients include apparel makers and consumer-package companies, has been sending emails out telling its clients not to worry. Stord uses a cloud-based platform to offer services like warehousing and fulfillment and handles tens of thousands of their packages a day.

By combining the volume of its broad portfolio of client brands and using software to make decisions, Stord has the leverage to better negotiate prices with the large parcel carriers, said Sean Henry, the company’s CEO.

“We’ve been negotiating with FedEx and USPS about rates around UPS so our customers don’t have to do that,” he said.

Stord said more of its clients had asked it to negotiate with carriers on their behalf. He said that equated to “tens of millions of dollars of annual revenue” for his business.

Still, some business owners are not letting the possibility of a UPS strike stress them out just yet.

Bill McHenry, president of Widgeteer, which sells cookware to large retailers, said he felt “kind of numb” after navigating the pandemic-related challenges. “I’ve seen a lot of stuff and the stories that I’ve heard and things we’ve had to go through and survive — not just the pricing but the upheaval of thinking you have a container but don’t,” he said.

He said the potential rail strike last December had been a bigger concern for him.

In the meantime, the possibility that a deal could be reached between UPS and the union that represents its workers, the International Brotherhood of Teamsters, remains. The union announced Wednesday that negotiations had broken down, after previously saying the sides had reached a tentative agreement. If an agreement is not reached, a strike could happen as early as Aug. 1.

If that occurs, “we would be collateral damage,” Keeler said.