FedEx Freight Seeks Approval to Run Twin 33-Foot Trailers

This story appears in the July 28 print edition of Transport Topics.

FedEx Freight wants to incorporate more widespread use of twin 33-foot trailers into its fleet as soon as next year to boost shipping efficiency and hopes to win congressional approval of those configurations in the next federal highway bill.

“Infrastructure is the main topic right now, and everyone understands that in terms of a long-term [transportation funding] bill,” William Logue, CEO of the less-than-truckload unit of FedEx Corp., said in an exclusive interview with Transport Topics on July 23 in Arlington, Virginia.

“It’s glaring that demand is coming. But at the same time, how do you become more efficient? That’s where our 33-foot recommendation comes in,” Logue said, citing projections that freight demand will double by 2035 from 2010 levels.

The configuration can increase capacity by about 18%, he said. “We have an opportunity to absorb a lot of that [freight] growth with our existing number of units.”

Between the major LTL and parcel carriers, “you’re talking 600 million miles reduced on the highways, with 100 million less gallons of fuel burned. We’ve asked for the 33-foot trailers with no increase in weight. That’s important. We firmly believe 33s are beneficial to infrastructure, not a stress on it.”

Logue said he was optimistic the provision could make it into a longer-term transportation bill, which most observers believe will not be completed before this fall’s midterm elections.

“Right now, we’re in a situation where it appears [the highway bill discussion] will be extended through May, so I think after the election season, there will be a lot of focus on getting this done,” he said.

Eighteen states allow some use of trailer combinations where both trailers are longer than standard 28.5-foot pup trailers in a typical dual configuration, said Darrin Roth, director of highway operations for American Trucking Associations.

In 1991, a freeze was imposed on longer combination vehicles. It marked the last time Congress made national changes to size and weight limits, although it has since granted some specific exemptions, Roth said.

FedEx Ground, a separate FedEx Corp. unit, is running twin 33-footers in Florida, and FedEx Freight is testing them in North Dakota, Logue said.

“Drivers that operate them are very comfortable and confident with them,” he told TT, noting they run on the Florida Turnpike.

Railroads have in the past opposed higher size and weight limits on trucking, but, Logue said, “We’ve spent a lot of time with the rail providers, making sure they . . . understand what our objective is. We’re pretty confident that the major [rail] carriers are not going to get in our way.”

ATA and several large national LTL carriers — including UPS Freight, Con-way Inc., Old Dominion Freight Line, YRC Worldwide Inc. and ABF Freight — support the use of the 33-foot units, Roth said. Asked if they were working to get it into the next highway bill: “That is the goal,” he said.

UPS, YRC and Con-way officials said last week they do not have 33-foot trailers. Other LTL carriers contacted by TT did not respond by press time.

FedEx Freight is coming off a strong fiscal fourth quarter that ended May 31, in which it posted a 12% increase in both shipments and revenue, and its profit before interest and taxes rose by $41 million to $122 million. It also had an operating ratio of 92.1, the best in seven years.

“Our objective was to get this business to double-digit margins,” said Logue, who took his current position in December 2009, and signed on with the Memphis, Tennessee-based package company in 1989. “I think we have a good game plan to get there. That is still our objective, to have sustained double-digit margins.”

While Logue declined to cite freight figures for the current quarter, he did say, “The momentum continues . . . it’s a healthy environment” for trucking.

The LTL carrier has undertaken several steps to increase the efficiency of its freight network, including re-engineering all of its facilities in the past year, Logue said.

It is also testing use of dimensioners, which measure freight by volume rather than just weight. The units, provided by third-party sources, are being tested in each of its regions, Logue said.

FedEx Ground plans to use dimensioners to refine its pricing structure beginning in January. Several other LTLs, including YRC, have begun using them to more accurately measure their freight.

“Some customers will adapt and change their packaging,” Logue said. “Ideally, you want to improve density of your linehaul,” which is often the most expensive part of operations.  “The majority of our business is contract, so as you head toward contract renewal, you can say ‘here’s what’s really being shipped.’ ”

FedEx Freight also is testing compressed natural gas trucks in addition to an initial two liquefied natural gas vehicles.

“When we started our initial tests, we thought it was all an LNG solution for the LTL space,” Logue said. “We now believe that CNG also plays a big solution.”

Senior Reporter Rip Watson contributed to this story.