FedEx Freight May Put Shipments on Rail in Future

FedEx Freight May Put Shipments on Rail in Future

Trucking company FedEx Freight, which has pointedly rejected rail transport in the past, could switch and turn to intermodal in coming years if the price is right and customers want the option.

The transportation industry is changing rapidly, and carriers must also be ready to change, Bill Logue, president of FedEx Freight, told shippers at the NASSTRAC annual meeting this week in Orlando, Fla. "Customers want options," said Logue, president of FedEx Freight.

The less-than-truckload sister company of FedEx Express has characterized rail transport as inefficient and unwieldy for what it terms “fast-cycle logistics,” delivering freight next-day or second day up to 800 miles. The stance has put FedEx Freight on the opposite side of UPS, which has long been one of the largest customers in the rail industry for the longer linehaul portions of its domestic parcel network.

Logue says he isn't ready to drive freight toward intermodal yards. "We find in most cases the railroads still have a transit time issue," he said.

"But five years down the road, intermodal may be much more significant. As international globalization continues, the dynamics will change, and there will be an opportunity for more rail," Logue said.

Other carriers see intermodal's length of haul shortening considerably, especially in the East, as Norfolk Southern and CSX build the infrastructure needed to haul intermodal freight economically in the 500- to 800-mile range.

"In the East we're seeing more intermodal opportunities for what would typically be considered shorthaul," said Chad Thomas, director of intermodal at J.B. Hunt Transport Services.

"There are significant highway conversion opportunities for shippers in that market," Thomas said.

Contact William B. Cassidy at wcassidy@joc.com.