Demand drops, employees take leave! FedEx freight streamlines transportation network and closes 29 outlets!

FedEx Freight is closing 29 locations in its network and implementing another round of temporary furloughs as demand continues to decline. Operations in the affected areas will be consolidated to other locations starting August 13, according to an emailed statement.

"We continually review our network to ensure we have the right design to respond to changing market dynamics," FedEx Freight said in the statement. "Through this process, we have identified opportunities to consolidate operations across multiple locations to improve customer service levels and gain efficiencies by reducing touch points, while reducing our cost to serve."

FedEx Freight's statement did not specify what types of locations would be affected by the merger, but according to FedEx's website, the company currently has about 400 service centers in its network. It also did not specify how many employees would be affected by the decision, but said the department helped them "find other open positions whenever possible."

The furloughs "for certain job categories" will begin May 28, following furloughs that began in March. All furloughed employees will be recalled on or before August 25, and their health benefits will be maintained. FedEx noted that it will offer eligible employees the opportunity to permanently transfer to other markets where it has hiring needs.

FedEx Freight, along with other FedEx units, has been cutting costs and streamlining its network in the face of falling demand. Revenue at the freight unit fell 3% year over year in the quarter ended Feb. 28 as average daily shipments plunged 12%. However, reduced operating expenses helped the company's operating income grow 15% year over year.

“Moving forward, FedEx Freight will continue to strategically invest in network capacity to support business growth and meet customer needs,” the company said in a statement. “FedEx continues to maintain normal operations and provide the essential services our customers rely on.”

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