FedEx to use intermodal for first time

FedEx Corp.'s freight unit will use rail intermodal service for the first time when it rolls out its revamped less-than-truckload (LTL) operation on Jan. 31.

William D. Logue, president and CEO of FedEx Freight, said the division will use intermodal to support its new "economy" service, where shipments will move in transit times of three days or more, regardless of the length of haul. The economy service is one of two new offerings; the other, called "priority," is designed for more time-sensitive shipments that must reach their destination in two days.

In a late December interview with DC Velocity, Logue stressed that FedEx will use intermodal sparingly, at least at the start. However, he added that the unit has strategically positioned its so-called dual-use hubs—facilities that will handle both "economy" and "priority" products—in locations that provide "access to rail facilities."

FedEx generally eschews the use of intermodal, though its FedEx Ground parcel unit does use the service. By contrast, its chief rival, UPS Inc., has long been the country's largest single-company user of intermodal services.

The new FedEx operation, which will will keep the name FedEx Freight, is the combination of the company's regional and long-haul LTL businesses. The company announced last August that it would consolidate the two businesses effective Jan. 31, 2011. The move resulted in the shuttering of 100 terminals—about 20 percent of its terminal system—and the loss of 1,700 jobs. The unit had employed 34,000 workers.