FedEx is shuttering four facilities in southwestern Florida in 2024, according to Worker Adjustment and Retraining Notification (WARN) Act notices filed on April 17. The four closures will result in the layoff of 220 couriers and eight managers.
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The closures, which occurred across two ship centers in Naples, one in Punta Gorda and one in Fort Myers, will take place July 29, the filing said.
Some employees who currently work at the facilities will remain employed at FedEx, but will be relocated. Terminated employees can pursue other positions within the company.
“Each market is unique and operational decisions such as this are based on a number of factors, including volume fluctuations, customer demand, facility footprints and more,” FedEx said in a statement. “Decisions of this nature are never made lightly and are the result of much thought and consideration for the needs of our business.”
In the 12 months prior to March, FedEx cut its workforce by nearly 22,000, according to chief financial officer John Dietrich, who told shareholders in an earnings call to “expect additional opportunities in the future as we move forward with our transformation.”
The closures and layoffs come as the package delivery giant is in the middle of a massive cost-savings plan that aims to cut $4 billion in expenses by 2025, and $2 billion more by 2027. This cost-savings involved the wider consolidation of its operating companies, so that FedEx Express, FedEx Ground and FedEx Services would be combined under one entity.
FedEx is also losing a massive client in the United States Postal Service (USPS), which is leaving their air cargo partnership to team with rival UPS . But that partnership had delivered major revenue and profit challenges for FedEx in recent years as the USPS has shifted more of its air volume to ground.
The Memphis-based company attributed FedEx Express’ 11 percent decline in average daily freight pounds in the third quarter, and 16 percent decline in the first three fiscal quarters of 2024, in part to the lower air volume from USPS.
Payments from the government agency to FedEx plummeted nearly 30 percent to roughly $1.7 billion in fiscal 2023, down from $2.4 billion three years prior.
FedEx also pointed to weak parcel demand, which has been a continued problem for the shipping industry amid a wider freight recession that has persisted since late 2022. The company’s Ground division saw flat third-quarter volumes, while its less-than-truckload (LTL) FedEx Freight division endured a 3.2 volume dip.
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The lower volumes led to a 2.2 percent revenue decline to $21.7 billion for FedEx.
This sluggish demand environment has forced UPS to take similar measures, especially since the company signed a massive union contract for 340,000 workers the year prior. The company conducted 12,000 layoffs of its own starting in January and put its freight brokerage, Coyote Logistics, on the market.
But the company also followed in FedEx’s footsteps by implementing its own $3 billion cost savings plan that would include the shuttering of 200 facilities.
If UPS’ first-quarter earnings are any indication, the demand environment could be improving already. According to CEO Carol Tomé, average daily volume dipped 1 percent year over year in March—an improvement over the 3.2 percent dip through the whole quarter. The Atlanta-based package delivery company expects revenue and volume to return to positive growth in the 2024 second half.
For March, preliminary data from the Bureau of Labor Statistics (BLS) says that there are 1,068,300 couriers and messengers, 65,700 fewer than the 1,134,000 employed two years ago—when seasonally adjusted employment in the sector peaked.
Like FedEx, other logistics firms are having to reduce headcount amid shuttering facilities in their network.
Michigan-based Universal Logistics is cutting 677 employees across two Detroit subsidiaries, according to two Worker Adjustment and Retraining Notification (WARN) Act notices filed March 22.
Both companies will be closing their facilities, resulting in the mass layoffs. Job cuts will affect 230 truck drivers who worked at the Universal Dedicated of Detroit. Logistics Insights Corp.’s layoffs includes 164 warehouse workers, 212 forklift operators, 26 dockworkers and 45 clerical employees.
Universal Logistics provides truckload transportation, intermodal and logistics servixes across the U.S, Mexico, Canada and Colombia. The company recently began a $50 million expansion into the Roanoke, Va. market with a new 254,000 square foot facility that is expected to host 45 new employees.
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