FedEx Positions For Overflow Amid Anticipated UPS Strike, Advises Customers To Start Shipping Now

FedEx Corp FDX issued a call to action on Thursday for potential customers amid a possible strike by workers at United Parcel Service, Inc UPS.

What Happened: The move by FedEx aims to protect its existing customer capacity and service during an anticipated industry disruption.

"Shippers who are considering shifting volume to FedEx, or are currently in discussions with the company to open a new account, are encouraged to begin shipping with FedEx now," the company said in a statement.

The Teamsters Union, representing nearly 340,000 UPS workers, is threatening what could be the largest labor strike in the U.S. in decades. The union’s contract with UPS is set to expire at the end of July, and negotiations for a new contract have reportedly stalled.

The union is advocating for higher pay, more full-time jobs for UPS employees, removal of surveillance cameras from delivery trucks, and more.

Read here: UPS, Teamsters Union Stare Down Largest Strike Since 1959 As Contract Talks Break Down

UPS is a significant player in the U.S. economy, handling nearly 25% of all U.S. parcel volume — roughly 24 million packages daily. A strike would not only disrupt the nation’s supply chains, but also delay the delivery of packages to millions of Americans.

With the standoff between UPS and the Teamsters Union ongoing, FedEx is positioning itself to accommodate any overflow of business.

For investors, the recent press release from FedEx might suggest that the negotiations between UPS and Teamsters may not reach a conclusion by the end-of-July deadline.

Though, it should be noted that Deutsche Bank AG expects the strike to be averted, telling investors in May that shares are likely to underperform until the new labor agreement is reached.

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