HIGHLIGHTS
- FedEx Supply Chain is going to put an end to the operation of several facilities this year.
- Not only FedEx Supply Chain but also other 3PL providers have put an end to their facilities as contracts with big customers expire.
FULL ARTICLE
The closure of four facilities of FedEx Supply Chain
FedEx said in a statement that the closures were “part of the normal course of business,” in spite that the company did not have any closures in California, Pennsylvania or Tennessee last year that warranted WARN notices.
A California facility will close because FedEx Supply Chain is relocating some co-packing processes and shipping operations to Columbus, Ohio, “at the request of its customer,” according to a letter. Management and operation of a Pennsylvania facility will discontinue “due to our customer’s decision to transition its business to a new location that will be managed by a new third-party logistics provider,” a company representative said in a letter to local officials.
As WARN records, the closures will impact more than 450 employees. FedEx has promised that it’s informing employees of other job vacancies.
The story of no one’s own
According to Reuters, XPO Logistics closed multiple facilities in 2019 in which Amazon was the customer. CEVA Logistics provided notice last year that it would lay off 87 employees at its Carrollton, Texas, facility serving Raytheon. This was due to “Raytheon moving the work to XPO Logistics,” a CEVA representative said.
According to a 2019 report from the UC Berkeley Center for Labor Research and Education and Working Partnerships USA, lead firm contracts with 3PLs typically last for three to five years before being rebid.
The report also said, “Competition in the 3PL market is cutthroat, and a key determinant for whether one 3PL wins a contract over another is price”.
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