Dive Brief:

• FedEx Freight has furloughed an undisclosed number of employees in what the company called "a difficult decision." A FedEx statement emailed to Transport Dive said the temporary furlough was "to align our workforce with current operational and business needs ... We will continue to evaluate the environment and bring back furloughed employees as business circumstances allow."
• FedEx officials said the action was because of the economic impact of COVID-19, and was necessary "to protect the financial stability of the company for the long-term benefit of our workforce, customers and shareholders. ... We do not take actions like this lightly."
• FedEx Freight employees affected by the furlough will continue receiving health benefits for four months while maintaining eligibility for expanded state and federal unemployment benefits under the federal stimulus bill, FedEx said.

Dive Insight:

The announcement by FedEx comes less than a month after its earnings call, in which it highlighted how well FedEx Freight had done for its third fiscal quarter, ended Feb. 29. Income from FedEx's LTL and big and bulky delivery segment grew 16% year over year in that quarter.

The FexEx Freight segment makes up less than 10% of FedEx employees, with 45,000 employees at 370 services centers. FedEx Freight has more than 25,000 vehicles and averages 105,000 daily shipments, according to its website. The segment made $7.6 billion in fiscal year 2019.

But the coronavirus crisis is spreading economic misery far and wide, and quickly. The median estimate of economists surveyed by Bloomberg earlier this month was for a second-quarter jobless rate of 12.6%. Some economists believe the figure could jump to 20% this month, according to Bloomberg.

That likely means jobs once thought safe, even during the shutdowns and slowdowns, are not.

The Wall Street Journal reported a second wave of layoffs and furloughs has hit groups of workers who have been working from home: corporate attorneys, government workers and business-service workers. Transport Dive sister publication Restaurant Dive reported on Thursday that Yelp, a review website, laid off 35% of its staff because so many restaurants have suspended operations.

Fleets had a vigorous response to the crisis in its early stages, as consumers stripped shelves of hand sanitizer, tissue paper, paper towels, medicines, and some fresh foods. But given so many factories are idled and restaurants closed, some fleets have begun to notice business waning.

"Increases in March were based on exceptional demand from shippers through March 22, at which point the market turned dramatically," Peggy Dorf, DAT Solutions senior analyst, said Friday. "Consumers and supply chains began to adjust to disruptions caused by the COVID-19 pandemic, and the urgency to replenish inventory and secure available capacity on the spot market fell significantly."

The national average van load-to-truck ratio was 1.5 for the week ending April 5, down from 2.8 the previous week. The national average reefer load-to-truck ratio fell to 2.6, down from 4.9 the previous week, DAT reported.

FedEx declined to share its memo to workers from CEO Fred Smith, and did not disclose the exact number of employees to be furloughed. The furlough follows the decision of Smith to cut his salary for six months, from $115,402 per month to $10,728 per month, effective April 1.