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teams, FedEx said that pricing offers with large customers must be signed on or before July 17 or the offer will be withdrawn.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.