While we’ve seen layoffs in the tech industry skyrocket over the past few months, we’re now observing them in the shipping industry – in the middle of Peak Season.
While layoffs within the tech industry have unfortunately become common place with the current state of the global economy, the shipping industry has largely avoided them. We’ve seen the metrics, like 11,000 laid off a Facebook, 13% of the staff at Redfin, or hundreds from Salesforce – but now we’re seeing layoffs at Amazon and FedEx. Which begs the question asked by U.S. shipping expert Craig Fuller “When was the last time that FedEx furloughed workers in the middle of peak season?”
FedEx Freight confirmed on Saturday that it is enacting furloughs in some U.S. markets due to “to current business conditions impacting volumes,” impacting the industry. This comes on top of the 47,000 furloughed in late May as FedEx looks to tighten its belt for what will be at least several down quarters.
How We Got Here
This is in line with FedEx’s recent trend of cuttings cost amidst dwindling demand. In recent quarters, FedEx Freight has pursued a strategy that will increase profitability per shipment, rather than only attempting to move as much volume as possible. As a result, they’ve seen a 21% increase in revenue compared to 2021, according to Transport Drive.
Other carriers now seem poised to make similar decisions, with the likes of Werner, J.B. Hunt, and Knight-Swift also adjusting their business model in the face of economic uncertainty amidst a slow peak season for shipping. “While peak season this year is underwhelming thus far, it will only hasten the capacity correction that is already underway,” Werner CEO, President and Chairman Derek Leathers said in early November.
Amazon is letting go 10,000 people, and while it represents less than 1% of the giant’s global workforce, that’s a staggering number of people to lose their jobs in what should be the busiest part of the year. It marks a trend, an ominous one at that, which has sent the trucking industry into tailspin as restocking is less of an issue to retailers in the current market.