FedEx Freight is closing 29 locations in its network and enacting another round of temporary furloughs as demand continues to fall.
Operations in affected places will be consolidated to other locations, effective Aug. 13, according to an emailed statement.
"We continuously review our network to ensure we have the right design to address changing market dynamics," FedEx Freight said in the statement. "Through that process, we identified opportunities to consolidate operations in several locations to improve customer service levels and improve efficiencies with fewer touchpoints, while lowering our cost to serve."
FedEx Freight's statement did not say what types of locations would be affected by the consolidation, but the company currently has around 400 service centers in its network, per FedEx's website. It also did not specify how many employees would be affected by the decision, but said the unit help them "find other open positions where possible."
The furloughs "for certain job classes," will start May 28 and follow the furloughs that began in March. All furloughed employees will be recalled on or before Aug. 25, and their health benefits will be maintained. The company noted that it will offer eligible employees permanent transfer opportunities to other markets with hiring needs.
FedEx Freight, along with other FedEx units, has been cutting costs and streamlining its network in the face of declining demand. The freight unit’s revenue fell 3% YoY for the quarter ending Feb. 28 as average daily shipments plummeted by 12%. However, reduced operating expenses helped the company increase its operating income by 15% YoY.
"FedEx Freight will continue to strategically invest in network capacity in the future to support business growth and the needs of our customers," the company said in its statement. "FedEx continues to maintain operations as normal, providing the essential services our customers depend on."
