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Dive Brief:
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FedEx Freight reported Thursday total shipments fell 1% year over year during the July to September period, the LTL carrier's first operating quarter since becoming an independent company June 1.
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Customer retention and spinoff transition processes were the company's focus during its first four months of business as a standalone company, President and CEO John Smith said on a call with analysts Thursday.
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"Our priority was retaining customers, maintaining service levels and successfully guiding customers through the separation," Smith said on the call.
Dive Insight:
FedEx Freight's transition to independence meant sales resources were directed toward ensuring existing customers remained with the carrier, Smith said.
"We view that as a necessary step — one that positions us well to pursue deeper penetration of attractive verticals and customer segments in the periods ahead," he said.
Focusing on retention limited time for business prospecting, but was effective enough to keep total shipments and tonnage per day mostly flat YoY.
Between June and September, the carrier reported:
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Total shipments of 7.64 million versus 7.66 million the same period a year ago.
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Tonnage per day of 41,683 was mostly unchanged from 41,702 the same time last year.
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Total tonnage, meanwhile, increased 1% YoY to 3.58 million versus 3.54 million last year, an increase executives credited to improving freight conditions.
As transition initiatives turn to business growth, Smith said the company now is in a "hunting phase." Sales teams are pursuing customers that can capitalize on FedEx Freight's extensive national network, he said.
"We've landed a few new accounts as well as grown some of the existing accounts," Smith said. He added business from existing customers grew about 3% during the June to September period.
During its investor day event in April, FedEx Freight noted it saw opportunities to serve more healthcare, grocery and small and medium-sized businesses, while expanding market share in the technology sector, specifically serving data center customers.
Smith said the company is seeing movement in food and technology as well as retail, where it has seen the most success, thus far.
"We feel pretty good about our plan and how we're going after and attacking these verticals," he said.
EVP and CFO Marshall Witt said the company built momentum during the June to September period and expects that to continue the final months of the year.
"We expect to actually see that expand in quarter four, which means continued growth and continued profitable growth and volume," Witt said.
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