Surface Transportation
FedEx Freight shut down seven terminals in FYQ1 after closing 29 facilities in the prior fiscal year . Jon Tetzlaff / Shutterstock . com
FedEx Freight ’ s revenue dropped 2.4 % year over year to $ 2.3 billion in its fiscal first quarter , while its operating profit fell 9 % to $ 439 million . Nearly half that decline was due to one fewer operating day in the quarter compared with the same period last year , FedEx said .
The LTL provider ’ s total shipments per day dropped to 92,008 for the quarter , down 2.8 % year over year and 15 % from the same three-month period in 2022 .
That ’ s still well above the number of shipments handled by the next-largest carriers by revenue , Old Dominion Freight Line ( ODFL ) and XPO .
US LTL annualized pricing gains narrow to 1.2 % in August
US long-haul less-than-truckload ( LTL ) producer price index ( PPI )
245
240 180 235
230
225 L Jan 2023 Jul Jan 2024
Jul
Notes : US BLS producer price indices are based on selling prices for trucking services
Source : US Bureau of Labor Statistics data , JOC analysis
LTL PPI
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In the quarter ending June 30 , ODFL and XPO moved 48,444 and 53,519 shipments per day , respectively . Both carriers also reported a drop in daily shipments for August in mid-third-quarter financial updates released in September .
In its earnings presentation , FedEx Freight said its daily shipment count fell 2 % in July and 7 % in August from the same months last year .
Shipment counts this August are being compared with counts that had swelled because of an influx of freight from former Yellow customers last August .
FedEx attributed the volume decline to a “ challenging US industrial economy ” and the transfer of heavier freight to truckload carriers . Dwindling shipment counts also confirm that with Yellow firmly in the rearview mirror , there ’ s little new LTL freight to be found .
That will eventually have an impact on LTL rates , although FedEx Freight and other carriers say LTL pricing remains disciplined , with carriers sticking to their pricing gains .
But the latest long-distance LTL producer price index from the US Bureau of Labor Statistics shows year-over-year pricing gains slowing , rising only 1.2 % from one year ago in August . That ’ s another sign of dissipating distortion .
FedEx Freight expects a positive turn in LTL demand , but not until the first half of calendar year 2025 .
“ Obviously , there ’ s a tough freight environment right now ,” Carere said . “ We expect LTL shipments to inflect positive later in the fiscal year .”
email : bill . cassidy @ spglobal . com
34 Journal of Commerce | October 7 , 2024 www . joc . com