FedEx’s Great Timing on Watkins Deal

Satish Jindel  •  Transport Topics

June 5, 2006


In announcing the recent decision to purchase Watkins Motor Lines, FedEx supported getting into longhaul LTL business with a statement that “growth is dependent on accelerated economic activity and competitor failures”. In light of recent economic news about inflation, rising fuel prices and the like, mention of competitor failures is noteworthy.

The closing is scheduled for August 2006, about 18 months prior to March 31, 2008, expiration of National Master Freight Agreement that covers most hourly workers within YRC Worldwide and at ABF Freight System. It is also timed to handle any longhaul freight diversion that might result from UPS contract with Teamsters that expires July 31, 2008. Both YRC and UPS Inc. will enter these negotiations with “double breasting,” or a mixture of union and nonunion employees…