Fedex Competitors Too Busy To Help
There may be some bad news for last-minute Christmas shoppers who have come to rely on overnight delivery services to get their gifts under the tree on time.
If the pilot union slowdown against Federal Express Corp. begins to have an impact on holiday deliveries, its competitors said Monday it was unlikely they would be able to pick up the slack. FedEx is by far the largest overnight package delivery service, with nearly half the national market.
Contract negotiations between FedEx and the Air Line Pilots Association (ALPA) broke down early Saturday and the union immediately ordered its members to refuse to fly overtime flights in an effort to disrupt service during the heavy Christmas season. FedEx normally counts on the overtime work to guarantee overnight deliveries during the holiday rush.
FedEx officials said they expect no disruption in service, and shippers are hoping that will be the case because it may be difficult to create a back-up plan.
FedEx competitors such as United Parcel Service and Airborne Express said they had little extra capacity to handle any large spillover. More important, they said they were not about to guarantee overnight delivery if it came at the expense of their regular customers.
Even the U.S. Postal Service, which would like nothing better than to pick up business from FedEx, questioned how much extra space it has in its fleet to handle extra business. FedEx has the contract to provide all overnight delivery service for the federal government. “We have some capacity, but I can’t say we can handle everything,” said Postal Service spokeswoman Sandra Hardings.
Scott Hopper of Airborne Express said his company might be willing to take on new customers if it had extra flying capacity, “but we’re not going to guarantee them the same service as our regular customers.” Airborne, according to Hopper, does not normally go after residential shippers such as large catalogue companies.
UPS spokesman Ken Shapiro said it plans its peak holiday delivery season to be able to guarantee the shipments of its “loyal” customers. “We will absolutely not go out and solicit FedEx business,” he said. “Capacity is very tight and we don’t know if we’ll be able to handle any major volume from other customers.”
DHL Worldwide Express, which specializes in international deliveries, said it had a 12 percent to 15 percent increase in calls Monday from potential customers. DHL spokesman David Fonkalsrud said some of the calls were part of a normal seasonal increase, but a number reflected concerns among shippers about the FedEx situation. Unlike the domestic carriers, DHL said it could find the planes, if necessary, to handle overseas shipments.
But all anybody really could do Monday was watch and wait. Even the pilot union admitted it would be at least a week before there was any indication of just how effective their “job action” might be on FedEx’s operations.
Greg Smith of the Colography Group in Atlanta, which monitors the delivery industry, said he did not expect to see any real impact from the pilots’ action until Dec. 8 or 11 when the peak Christmas season really begins.
Smith said that in domestic overnight delivery “there is really only one other guy that plays at the FedEx level, and that’s UPS.”
Smith said that many shippers have probably already made contingency plans in the event the labor action is effective.
FedEx officials said they expected deliveries to proceed normally and that flight operations for Monday night were “adequately staffed.” Every night FedEx flies deliveries in and out of Memphis for overnight distribution. Monday night would be the first opportunity to test the effectiveness of the union’s action.