FedEx has issued a warning to its customers to shift their shipment volumes away from the rival carrier, UPS, ahead of a potential strike this summer. The email sent to FedEx customers advised them to onboard their volumes by March 31st, as this will factor into the carrier's capacity planning in the event of a strike. The email stated, "Don't put it off until it's too late!"

The contract between UPS and the Teamsters is set to expire on July 31st, and if an agreement is not reached, the union has threatened to go on strike. FedEx has warned its customers that in the event of a strike, no single carrier can absorb all of UPS' package volume. To alleviate customer concerns, the email from FedEx stated, "I understand that the prospect of a disruption can be unsettling, so I wanted to reassure you that FedEx is committed to prioritizing volume from our current and actively shipping customers in order to maintain operations and service levels."

Don't Get Caught in the Middle of a UPS Strike: FedEx Advises Shippers to Switch

According to a presentation accompanying the email, capacity will be prioritized on a first-come, first serve basis after March 31st. This has led to concerns for those who rely on UPS for their shipping needs, and industry experts suggest that shippers consider a multi-carrier strategy rather than relying on one major company. Better Trucks co-founder and CEO, Andy Whiting, stated that a potential customer had shared the same FedEx message with him and that a potential UPS strike was further proof of the need for a multi-carrier strategy.

UPS and the Teamsters will begin national contract negotiations in April, and CEO Carol Tomé is optimistic that a "win-win-win" contract can be reached before the contract expires. In a statement, UPS confirmed its belief in reaching an agreement and dismissed FedEx's claims as "exaggerated."

In the event of a demand surge, FedEx has stated that it will prioritize volume from its current and actively shipping customers. The company stated, "We are committed to providing dependable service to our customers, and that will remain our priority." However, FedEx has been dealing with volume declines as demand cools after a surge early in the COVID-19 pandemic. The company has implemented layoffs, service reductions, and flight reductions to reduce operating costs during this period of low demand.

According to Dean Maciuba, Managing Partner USA for Crossroads Parcel Consulting, the volume is "fleeing FedEx, particularly on the Express side." FedEx can prepare for any increase in parcels by imposing a March 31st cutoff, which will allow the company to staff up and manage an unexpected surge in volume. Maciuba explained, "They're saying, 'We'll take your volume, but we need it by March 31 so we can step up and manage it properly.'"

In conclusion, FedEx's advice to shift shipment volumes from UPS to avoid potential disruptions from a strike this summer has raised concerns for those who rely on UPS for their shipping needs. The contract between UPS and the Teamsters will begin national contract negotiations in April, and the outcome of these negotiations will be crucial for the future of both companies.