FedEx’s board of directors on Wednesday approved the spinoff of its less-than-truckload business, FedEx Freight.
The move is another step in the process, announced in December 2024, to make the carrier a standalone company. As a result of the separation, FedEx Freight shares will begin trading on the New York Stock Exchange on June 1 under the symbol “FDXF,” per the release.
While the carrier’s spinoff marks a beginning and has some resemblance to a start-up business, FedEx Freight is by no means a new LTL segment player, according to industry experts.
For one, FedEx Freight will retain its name for the next few years, a company spokesperson said in an email to Trucking Dive. The company has a trademark agreement with FedEx to use the brand for the next five to 10 years.
The arrangement expires after the initial five-year term, the spokesperson said. However, it will automatically renew for one-year terms for an additional five years unless either FedEx Freight or Federal Express terminates the agreement. The agreement will not exceed 10 years.
Besides keeping its name, having more than a year to prepare for the spinoff has helped FedEx Freight develop processes and technology, allowing it to operate more efficiently as an LTL carrier, according to Scooter Sayers, an LTL consultant with Sayers Logistics.
Sayers, referencing FedEx Freight’s April 8 investor day event, said executives stressed that the company needed to shift away from its reputation as a worldwide platform that did not handle LTL freight well. Instead, they emphasized what needed to change to compete effectively on day one after the spinoff.
“For their spinoff, they realized that they needed to scrap the operating platform they have been using and replace it with a brand new platform,” Sayers said.
He said FedEx Freight will likely utilize artificial intelligence to streamline processes and gain operational efficiencies, much like other carriers, including Landstar System, Roadrunner, Schneider National, Ward Transport & Logistics and ArcBest, have done.
But what other LTL carriers may be interested in is what FedEx Freight described as a new rating-pricing platform, which can readily handle dimension-based pricing, Sayers noted. That would involve using the pallet weight, dimension and density to set the price.
“They described this as an industry first,” he said. “That might be a bit of a stretch, but I can see FedEx Freight making this a big part of their sales proposition going forward, a pricing program that bypasses the traditional class-based system.”
Jonathan Phares, assistant professor of supply chain management at Iowa State University, said FedEx Freight’s load management technology will require existing customers to migrate to its new system, which may pose some near-term challenges that they can likely overcome quickly.
“[FedEx] Freight doesn’t give me the impression that they’re operating like a start-up,” Phares said. “A start-up struggles to establish legitimacy and growth to survive, often by disrupting an existing market or creating a new one.”
FedEx Freight, which FedEx launched in 2001, is already past that phase.
“[FedEx] Freight is starting on second or third base, given they already have infrastructure and a strong customer base,” Phares said, adding that the company is “building new technology and processes out of necessity.”
