SCD: FedEx will sell space on empty container imports as a congestion-bypass service

SUPPLY CHAIN DIVE reports:

Dive Brief:

– FedEx plans to start selling capacity on the empty 53-foot containers it imports from China as part of a regular service offering that helps shippers bypass congestion, FedEx Logistics CEO Udo Lange said in an interview. The service will begin in January.

– The containers ship from a South China port outside of Shenzhen to a U.S. West Coast port destination north of Los Angeles and Long Beach. Shippers can cut 20 days’ worth of transit time port-to-port through this service by avoiding bottlenecks at the San Pedro Bay ports, Lange said.

– FedEx imports the containers for eventual use in its domestic LTL arm FedEx Freight. “In the past this was imported empty, because it doesn’t go on another ship,” Lange said. “But we can now take this capacity and sell it to our customers and then go into a smaller port.”

Dive Insight:

FedEx’s upcoming service offering is one way the company is leveraging the size and scale of its logistics operations to mitigate supply chain issues for customers. But much of the focus still remains on easing congestion at the ports of Los Angeles and Long Beach, which handle 40% of the U.S.’s containerized imports.

“LA can be seen as the heart of the supply chain to a certain extent,” said Lange, a participant of the White House Supply Chain Disruptions Task Force. “Now you have a clogged artery there, and you can’t just pump it out anymore. Now you really need to do more drastic heart surgery and from then on reintroduce flow…”

To read the full post, please click here.