FedEx Freight to furlough workers as demand drops

MEMPHIS, Tenn. (WMC) - FedEx Freight announced it will furlough workers in response to a decrease in demand for freight carriers.

The shipping giant did not specify how many employees this will affect.

This comes after FedEx said it expected to cut $2 million in costs back in September.

We reached out to FedEx Freight for a statement on the announcement:

“In response to current business conditions impacting volumes, FedEx Freight is enacting a temporary furlough in some U.S. markets to align our workforce with operational requirements. Some eligible employees will be offered permanent transfer opportunities to other markets that have hiring needs. FedEx Freight will maintain health benefits and provide other financial incentives for furloughed employees and anticipates that many employees will volunteer to participate in the program. The company will continue to evaluate the environment and bring back furloughed employees as business circumstances allow.”

FedEx Freight, which is the highest-grossing leg of FedEx, only transports single items weighing 150 pounds or more.

FedEx Express and FedEx Ground, which are used for consumer goods, will not be affected by the furloughs.

Memphis economist John Gnuschke says this makes good business sense.

“Out of Express and Ground, Freight was the best... but having said that, it’s the best because they make these adjustments and change to demand,” Gnuschke said.

At the moment, it’s unclear where the furloughs would take place, or how many employees would be affected overall. But Gnuschke said the symbiotic relationship between the $45 billion business and the Bluff City can’t be understated.

“When FedEx does well, Memphis does well,” Gnuschke said. “When FedEx isn’t doing well, Memphis worries.”

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