An AI-Generated Daily Newsletter
for Logistics Professionals

• FedEx's Q2 operating income fell 18% to $1.05 billion, attributed to lower-than-expected Freight revenue amidst weak U.S. industrial production.
• The company plans to separate FedEx Freight into a new publicly traded entity within 18 months, aiming for tax-efficient execution.
• FedEx revised its fiscal 2025 forecast, anticipating flat revenue, with continuous cost reductions from the DRIVE program and a focus on capital expenditure management.

• FedEx Exits LTL Business: FedEx's strategic shift involves divesting its LTL unit, choosing to refocus on its core parcel and express delivery operations amid a more competitive landscape.
• Industry Trends: The move aligns with broader industry shifts, where logistics giants increasingly opt to specialize rather than diversify their offerings.
• Market Impact: The spin-off could reshape LTL market dynamics, creating a new publicly traded company with $9.4 billion in annual revenue, poised to compete independently.

• Kal Freight Inc., a California-based trucking company, faces fraud accusations involving non-existent assets and misappropriated collateral.
• Daimler Truck Financial alleges Kal Freight fabricated titles for 164 imaginary trailers, securing $16.8 million in loans, and illegally transferred 366 real trailers to its Canadian affiliate.
• Under Chapter 11, Kal Freight is restructuring, replacing leadership, and liquidating assets to stabilize operations amidst legal challenges.

• FMCSA proposes changes to broker transparency regulations, aiming to modernize practices and enforce carrier rights.
• The industry is divided: carriers support more access to transaction details, while brokers argue the rules are burdensome.
• The economic impact of these proposals is debated, with potential shifts in negotiation power and operational costs.

• Strategic Shift: FedEx prioritizes its DRIVE program, which focuses on cost optimization and data-driven decision-making, while separating FedEx Freight into an independent company.
• Operational Enhancements: DRIVE aims to foster efficiency and innovation through a new data-driven business model, reportedly essential in improving FedEx's overall operations.
• Market Impact: The separation of FedEx Freight aims to enhance competitiveness, focusing on LTL services, sales expansion, improved pricing, and network efficiencies.

• FedEx announced plans to spin off its FedEx Freight division, forming a new publicly traded company focused solely on less-than-truckload (LTL) services.
• Analysts highlight that this move allows both entities to better focus on their core markets, LTL and global parcel delivery, enhancing operational execution.
• Following the announcement, FedEx share prices surged as investors positively reacted, supported by continued cooperation agreements between the separate entities.

Key Developments

• The Defense Logistics Agency (DLA) implements a process mining tool following a successful pilot to streamline its order-to-cash process, uncovering 40,000 process variations.
• This tool will transition to a production environment starting February, enabling broader application across DLA for improving supply chain systems and enhancing process automation.
• Emphasizing digital-business transformation, the DLA aims to use this technology for inventory and warehousing improvements, potentially affecting audit processes and resource alignment.

• NAVSUP FLC San Diego introduces a revamped Logistics Support Representative (LSR) training program to address readiness needs.
• The two-week course offers practical lessons and civilian mentorship, improving certification rates from 4 in five years to 38 in FY 2024.
• Course expansion planned for other Fleet Logistics Centers, ensuring broader Navy supply chain readiness.

• Total Quality Logistics, the largest in Greater Cincinnati, is experiencing a 30% increase in shipments over the holiday season, likening the period to their 'Super Bowl'.
• Despite challenges like traffic jams and infrastructure issues, TQL has robust redundancy and communication plans to ensure timely deliveries.
• The increased demand reflects a 25% sales increase for their retailers between Thanksgiving and Christmas.

• Scan Global Logistics (SGL) has acquired ITN Logistics Group to enhance its Canadian operations.
• This acquisition strengthens SGL's service offerings and expands its footprint in Canada, adding market share and new locations.
• The deal awaits Canadian regulatory approval and is expected to close in Q1 2025.