Resource Center/Article • 05/25/2021
Carriers Amp Up Hiring with Margin Focus, E-Commerce Level Remains
E-commerce shipping volume remains high, leaving carriers to increase hiring and remain tightly focused on financial margins.
PARCEL CARRIER NEWS
FedEx forms a partnership with Adobe Commerce to dive deeper into e-commerce, while also announcing the FedEx E-Commerce Learning Lab. On top of all that, the company is working to reduce debt by 11% while simultaneously going on a hiring spree due to the continuous steady increase of online shopping.
- With the announcement of FedEx’s partnership with Adobe Commerce, the company is going beyond last mile delivery, forging ahead into the e-commerce consumer experience. Though how exactly the companies intend to combine and use their consumer data is unclear, it seems reasonable that FedEx, Adobe Commerce, and ShopRunner will be looking to improve the e-commerce shopping experience for both consumers and merchants from beginning to end, as well as to drive demand.
- FedEx E-Commerce Learning Lab announced in collaboration with Accion Opportunity Fund (AOF). AOF is a nonprofit organization that seeks to help small business owners gain access to funding, networking, and leadership resources. FedEx and AOF created the E-Commerce Learning Lab to carry that same mission forward for businesses affected by COVID-19, with a special emphasis on minority-lead businesses. The program plans to reach 150 small business owners across the U.S. “It is no secret that the pandemic has had a significant impact on small business owners, especially women and people of color. Through our new collaboration with AOF, we are helping to level the playing field and get these small businesses back on their feet, which is especially important as record growth in e-commerce volumes continue,” said Bre Carere, Executive VP and CMO at FedEx.
- FedEx to Reduce Debt by 11 Percent Following Completion of Strategic Public Offerings. Following a recent completion of the offerings, $5.8 billion of FedEx’s existing debt will be redeemed with a section of the proceeds, eliminating near-term debt taken on as a direct response to COVID-19.
- FedEx is looking to fill open positions due to the high demand of continuous online shopping – the company is on a hiring spree. | FedEx Ground in Atlanta, GA, Denver, CO, Harrisburg, PA, Hartford, CT, Helena-West Helena, AR, Nashville, TN, Sacramento, CA, are part of the hiring spree, with up to 400-3,000 jobs per location being sought.
UPS releases their 1Q 2021 earnings and is getting quite an upgraded rating on its stocks. TFI International seeks closer ties to the carriers, and UPS sees some drivers speak out against long hours as Americans continue to ship more gifts across Spring/Summer holidays rather than meet in person due to COVID-19 concerns. On a lighter note, UPS helps dreams come true.
- UPS shares are trading higher after receiving improved Wolfe Research rating, moving from “peer preform” to “outperform”. Sanford C. Bernstein gave UPS stock a “buy” rating and increased the target price to $200.
- TFI International wants to go above and beyond their $800 million deal with UPS and create closer ties. The deal could launch TFI to the top largest LTL providers in North America.
- Out of 1K+ respondents, a UPS survey finds 37% will be shipping Mother’s Day gifts rather than presenting them in person due to COVID-19 concerns. Of those shipping gifts, 28% announced that their items will be shipped with less than a 50-mile radiance. Mother’s Day beat out Valentine’s Day with a volume 4x more.
- Up to 100 UPS delivery truck drivers based in Auburn, ME, have publicly expressed concerns about prolonged work hours as COVID-19 continues to spur parcel increase.
- UPS recently celebrated a granted wish! A 6-year-old boy with Leukemia made the news after watching every day as the mailman came to deliver mail, and he decided right then he also wanted to be a mailman. So, UPS did just that – Mateo Toscano became the youngest UPS driver with help from the Make-A-Wish Foundation.
GRI & SURCHARGES
- FedEx: On May 10, 2021, the Peak Surcharge for freight shipments for certain origin/destination country combinations increased. Read more details here.
- FedEx Canada: On May 10, 2021, the surcharge for FedEx Canada Express international freight services increased on certain lanes. Read the announcement.
- Purolator: Purolator will be implementing changes to their Terms and Conditions of Service on June 7, 2021. An updated Terms and Conditions of Service will be available on the Purolator website on that date. Read the announcement.
LTL CARRIER NEWS
- US less-than-truckload (LTL) shippers are having a hard time catching their breath, with LTL carriers “pushing the pricing meter,” as Saia president and CEO Frederick Holzgrefe put it during an earnings conference call with Wall Street analysts last week.
Carriers are raising their base rates and contract prices and intensifying their focus on assessorial charges. Trucking operators and third-party brokers say they expect LTL rates to continue their climb through at least the end of the year, thanks to increasingly tight capacity.
“With strong service levels, our value proposition continues to present us with an opportunity to improve pricing,” Holzgrefe said. Saia implemented a 5.9 percent general rate increase in January, and annual contracts renewed in the first quarter brought in an average rate increase of 9 percent. That compares with a 6.6 percent average increase in Saia’s rates in the fourth quarter last year.
Pricing fluctuates with demand, but operating costs tend to stick once they rise. Those higher costs, coupled with freight demand that is outstripping LTL supply, leave LTL carriers expecting rates to climb even higher. “The cost to operate the business this year — either from recruiting drivers, maintaining drivers, investments in technology, etc. — supports the need for additional pricing,” Holzgrefe said.
SHIPPING INDUSTRY TRENDS
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