FedEx hits the rails

MEMPHIS, Tenn. — There’s a reason why you may have seen one or two FedEx ‘Multimodal’ trailers at rail yards over these last few months.

Joining most other large, long-haul LTL carriers (including rival UPS), FedEx Freight has begun using rail intermodal services for the first time in its history.

As part of its newly revamped network structure (which went live this week), the parcel delivery giant is following through on plans to be more active in the intermodal sector.

The company, which is North America’s second-largest LTL fleet, will use all four major U.S. rail lines as well as CN Rail.

According to DC Velocity, the move could shift up to a tenth of FedEx Freight’s miles from truck to rail.

In the past, the carrier has shrugged off intermodalism due to rail’s unpredictable levels of reliability, but new market realities (such as looming driver shortages and the rising cost of fuel) as well as intermodal’s improving service levels, forced the company to reconsider.

William D. Logue, president and CEO of FedEx Freight, said the carrier will use intermodal to support its new "economy" service, where shipments will move in transit times of three days or more, regardless of the length of haul.

As part of its restructuring, the company will offer two consolidated services: the ‘economy’ service and ‘priority’ for more time-sensitive deliveries within two days.

While Logue says FedEx will use intermodal sparingly to start, the freight division has strategically positioned its dual-use hubs (for both ‘economy’ and ‘priority’) close to rail facilities.  


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