FedEx Freight bolsters NAFTA-based services

Taking steps to augment its cross-border services in Canada and Mexico and meet customer needs in NAFTA markets, FedEx Freight, the less-than-truckload (LTL) subsidiary of FedEx, said this week it has added three new service center facilities.

The new service centers are located in Rochester, New York and two in Mexico, Culiacán and Silao.

A FedEx spokesperson told LM that the Rochester service center “serves as a gateway to and from Canada and has easy access to both Interstates 90 and 490.” And it also allows FedEx to expand its Priority next day service coverage to and from Canada between 13 U.S. markets and Canada.

FedEx Freight Priority is a fast-transit choice for reliable, time-sensitive LTL freight delivery, according to FedEx. It was introduced as part of FedEx Freight’s network configuration, which was rolled out in January 2011.

FedEx said that the Rochester center serves as a “gateway” to connect cross-border shipments to and from Toronto and Montreal. And the company added that the Rochester service center and all U.S. gateway centers for service to Canada are compliant with the November 1, 2012 Canada Border Services Agency eManifest requirement.

This requirement is a mandate made by the Canada Border Services Agency, according to the FedEx Freight spokesperson. The goal of the program is to identify potential threats to Canada while facilitating the movement of low-risk shipments across the border.  An informed compliance period for carriers will begin Nov. 1, 2012, and remain in effect until May 2013 when eManifest-enabling legislation and regulations are expected to be in place. In May 2013, eManifest highway carrier requirements are expected to be mandatory.

In Mexico, the Culiacán service center covers northwestern Mexico, including Mexicali and Tijuana, and the Silano center serves the state of Guanajuato in north central Mexico.

“FedEx Freight is committed to providing speed, reliability and simplicity in all geographic areas that we serve,” said Bill Logue, president and CEO of FedEx Freight, in a statement. “By expanding our service in Mexico and Canada, and by upgrading our online shipping solutions, our customers can reach more of their customers faster in these important NAFTA markets.”

FedEx also noted that shippers can now process cross-border LTL shipments to and from Mexico through the FedEx Ship Manager Software, FedEx Ship Manager, and FedEx Web Services, which it said is designed to streamline the shipping process and better manage information. The company said these tools also assist shippers in creating customized reports and shipping labels, track shipment status, schedule pickups and used a shared address book for FedEx parcel and LTL shipments.

The FedEx spokesperson explained that FedEx Freight is “very committed to offering automation tools to LTL shippers,” adding that “these steps are reflective of that goal.”

In the fiscal first quarter, FedEx Freight had an operating income of $90 million, which represented a 114 percent increase over $42 million from the same time frame a year ago. Revenue—at $1.4 billion—was 5 percent better than $1.33 billion a year ago, and its 6.4 percent operating margin was ahead of last year’s 3.2 percent.

For the fiscal first quarter, FedEx said LTL yield rose 2 percent because of improvements in FedEx Freight Economy yields. FedEx Freight Priority and FedEx Freight Economy revenue per hundredweight was down 1 percent and up 10 percent, respectively.

And FedEx added that operating income and margin mainly went up due to profitable volume growth, higher yield, and operational efficiency improvements. Even with the various quarterly gains, composite weight per LTL shipment—at 1,150 pounds—dipped 1 percent.