FedEx’s decision to spin off its LTL unit marks the end of an era that began nearly 30 years ago when major parcel carriers sought to provide comprehensive transportation solutions for their customers. This strategic shift reflects a changing landscape in the logistics industry and a return to core competencies for FedEx.

The journey began in the mid-1990s when FedEx acquired Viking Freight, a regional LTL carrier operating primarily in the Western United States. This move was soon followed by the purchase of American Freightways in 2001 for $1.2 billion, which expanded FedEx’s LTL presence into the Midwest, South, and Northeast. These acquisitions were rebranded as FedEx Freight in 2002, creating a nationwide LTL network that complemented FedEx’s existing parcel services.

At the time, the strategy made sense. FedEx aimed to offer customers a one-stop-shop for all their shipping needs, from small packages to full truckloads. This approach mirrored that of its chief rival, UPS, which had acquired Overnite Transportation in 2005 for $1.25 billion to establish its own LTL division.

The idea was that by providing a full suite of transportation services, these companies could capture more business from their existing customers and attract new ones seeking simplified logistics solutions. It also allowed for potential synergies between different shipping modes and the ability to cross-sell services.