Be Nice To Your Freight Carriers!

Fed Ex Freight, Fed Ex’s LTL (less than truckload) carrier, not so quietly fired approximately 1,400 customers. Fed Ex sent a notice to customers on Friday, June 11th, that said:

“Starting June 14, 2021, and until further notice, FedEx Freight will begin implementing customer specific actions to control capacity and avoid backlogs in the most capacity constrained freight service centers…” (Emphasis added.)

https://www.freightwaves.com/news/fedex-freight-prunes-1400-customers-to-protect-service-levels

As the article mentions, shippers normally give more than a one business day notice before changing terms of service. Carriers usually reduce “bad” business by raising prices. Fed Ex’s action indicate how tight freight capacity is right now. The boldness of Fed Ex’s maneuver also tells me that they do not expect conditions to change anytime soon. It is one thing to send a customer a price increase; it is completely different to directly tell a customer you will not sell to him. 

Not too long ago, customers had power over carriers, particularly in the LTL market. If you were not happy with your carrier’s service or prices, there were carriers lined up to compete for your business. Consolidation, driver shortages, and a surge in demand have swung the pendulum wildly in favor of the shipping companies. 

Send your carrier rep chocolates. Buy drivers lunch. Do whatever you can to stay on the good side of your shipping partners. Without them, business comes to a screeching halt. The carriers know that they have the upper hand right now. And that isn’t changing in the near future.