By Natalie DeCoste
Customers received a shock when FedEx announced that it would be suspending some of its freight services.
Shipping giant FedEx informed customers that it would suspend roughly 1,400 customers from its freight shipping service earlier this month. The move was made to ease congested delivery networks that are overtaxed by endless package volume. With fewer customers receiving deliveries, FedEx aimed to reduce terminal bottlenecks and shipping delays.
“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,” the company told Trividia Health, a medical device manufacturer in Fort Lauderdale, Florida, in a suspension notice obtained by FreightWaves.
The freight industry has been heavily impacted by the economy reopening as COVID restrictions are lifted across the U.S. The country’s recovery is ramping up manufacturing and leading companies to replenish inventories, maxing out the capacity of freight vehicles.
“FedEx continues to keep commerce moving and deliver critical shipments during the COVID-19 pandemic. The impact of the virus has generated elevated volumes, and we continue to experience high demand for capacity and increased operating costs across our network,” FedEx spokesperson Jim Masilak said in a statement to FreightWaves.
In addition to cutting off some of its customers, FedEx is also set to impose a $30 per shipment fee on FedEx Freight deliveries to certain ZIP Codes after July 5. Affected areas include Sacramento, Seattle, and Miami, along with parts of New Jersey and Long Island, N.Y.
The surprise announcement from FedEx left businesses scrambling to find new ways to move their products. Companies were furious with FedEx, which was already on thin ice as the company struggled to keep up with deliveries this year. FedEx deliveries were 71% on time in May, compared to its rival UPS’s deliveries, which were 89% on time.
This week FedEx resumed deliveries to some of its customers following an outcry from the affected companies. On Monday, the company announced that it would relax its initial suspensions and be more precise about which customers would lose service.
Caught up in the wave of suspended services were big-box stores that dictate certain vendors use FedEx Freight and did not receive scheduled merchandise. It was reported that some major companies who use FedEx’s delivery services were enraged by the company’s handling of the situation and are looking for a way to ensure that they will not be cut off from suppliers again.
“Lowe’s was furious. I know Lowe’s is trying to replace them wherever they can because they cut off suppliers that were key to Lowe’s,” an anonymous source told FreightWaves.
