LTL News: FedEx Freight launches new offerings north of the border

Jeff Berman, Group News Editor -- Logistics Management, 10/13/2008

MEMPHIS—FedEx Freight, the less-than-truckload (LTL) subsidiary of FedEx, announced today it has rolled out new service improvements. One new offering is next-day business coverage between certain Canadian gateway cities and various U.S. locales, and the other being streamlining cross-border processes for shippers and carriers operating “fast cycle” logistics.

FedEx said in a statement that the next-business-day LTL service is between Toronto and key markets in the Great Lakes region, adding that it has been launched between Winnipeg, Manitoba, and the Upper Midwest region of Canada, which is becoming more active in cross-border trade processes. Some of the major U.S. markets this service segment will cover include Indianapolis, Cleveland, Chicago, and Toledo, as well as parts of Pennsylvania such as Pittsburgh.

The company also noted that it is now offering shippers with next-business-day LTL service between Vancouver, British Columbia and points in the Pacific Northwest, including Portland and Seattle, as well as next-business-day LTL service between Montreal, Quebec and all of New England and most of the Mid-Atlantic markets.

In an exclusive interview with LM, FedEx Freight President and CEO Doug Duncan said that today’s news, in some ways, has been an evolution of sorts.

“Up until we acquired Watkins Motor Lines [in September 2006], we served Canada with a partner up there,” said Duncan. “So once we acquired Watkins and got a small footprint in Canada, we went from three facilities to 11 facilities. We built out the infrastructure to serve the majority of the population in Canada.”

Aside from increasing its presence in Canada, the next initiative for FedEx Freight, said Duncan, was to augment its border/customs clearing process, which is very paper-intensive. 

This led FedEx Freight to bring these operations in-house to an internal clearance network, which provides electronic clearance documents to assigned brokers so that FedEx Freight can cross the border and make next-business-day deliveries, akin to what it does in the United States. According to a FedEx statement, this team’s services are available 24 hours a day, five days a week to handle distributing customs documents to assigned brokers, with the direct-carrier broker relationship creating effective customs clearance and quicker responses from shippers and their customers.

“It is our own operating system, people, terminals, and systems,” said Duncan, “and now we have brought the boarder clearance side in-house to have total control over it. In the U.S., we can deliver next-business-day up to 600 miles, and our whole intention is to automate the system so we can go from the U.S. to Canada close to that 600-mile radius as well, which is important when you consider the face that 90 percent of the commerce [activity] in Canada is within 100 miles of the border.”

In terms of shipper benefits and competitive advantages of today’s news, Duncan said that the company’s next-business-day service in the U.S. has been a “huge contributor” for the growth and market position of FedEx Freight, and he added that that company’s intention is to use that same speed and reliability to grow similar market share into Canada.

And with only having been directly operating into Canada for two years, which, Duncan noted, is a small base, this expansion will give FedEx Freight the opportunity to expand into the Canadian market.

“Our market share is still small [in Canada], because we have not been there long,” said Duncan. “There is not one dominant carrier up there; it is more of a whole host of carriers. Between the service and the brand awareness FedEx already has in Canada, this is really an extension of FedEx into Canada, which is already very strong with FedEx Express and FedEx Ground. The other part is customers that are shipping into Canada are the same ones we are dealing with in the U.S. It is a very similar customer base with a much improved offering on our side of the house.”