On Aug. 13, FedEx Freight's service center footprint in Arkansas will shrink significantly.
Out of the 29 company locations slated to close that day, seven are in Arkansas, according to a list of closures obtained by Transport Dive. That will leave six service centers in the state. Twelve other closures are in states neighboring Arkansas.
FedEx Freight closures target Arkansas, surrounding states
Many of the service centers FedEx is shuttering are territories once covered by Arkansas-based American Freightways, said Kevin Day, president of LTL at AFS Logistics, in an interview. FedEx acquired American Freightways before making the company part of its newly formed Freight unit in 2001.
"I think Arkansas was legacy American Freightways terminal density that's no longer needed," Day said.
FedEx announced the closures in May, along with another round of temporary furloughs, but it didn't disclose which locations it would shutter. Operations at affected locations will be consolidated into other facilities in the FedEx Freight network.
The decision came amid a decline in volumes at FedEx Freight that other LTL providers have also been weathering.
FedEx, which confirmed that the list of locations obtained by Transport Dive is accurate, said in a statement that the consolidations will help improve customer service levels while lowering its cost to serve.
"FedEx continuously reviews its network to ensure we have the right design to address changing market dynamics," the company said.
Although FedEx said service levels will improve, Day noted Freight customers in affected areas should keep an eye on any changes in pickup and delivery times after the closures.
He mentioned the closing of Freight's Roseburg, Oregon, facility as an example. If customers in the Roseburg area become covered by the company's Medford, Oregon, facility about 90 miles away, that could lead to later deliveries.
"To achieve first-thing-in-the-morning delivery in these closed areas will become challenging," he said.
FedEx Freight will still have a sizable service center footprint even after the closures. It currently has roughly 400 service centers in its network, according to FedEx's website. Additionally, the facilities it is closing don't include any significant intermediate stops for the typical LTL shipment lifecycle, Day said.
Still, Day said the only carrier "that may come close" to the scope of FedEx Freight's closures is Yellow Corp. Yellow in the midst of a network transformation that includes plans to sell 28 terminals that overlap with other locations' service territories.
Trimming operating costs has been a top priority at FedEx over the past year. The logistics giant announced its ambitious "Network 2.0" plan involving its Freight, Express and Ground units in June 2022, which includes shrinking its number of stations and cutting empty miles.
FedEx is also combining Express and Ground into one unified company to help facilitate the overhaul, although Freight will remain a standalone operation.