If you signed a FedEx Transportation Services Agreement in late 2024 or in 2025, the contract is doing something right now that nobody told you about.
It is preserving itself across the spin-off.
It is also, quietly, failing to preserve the one feature that probably made your pricing work as well as it did.
Last week I wrote about the Three Increases that follow from FedEx becoming a standalone parcel company. There is a fourth effect, specific to this spin-off, that deserves its own look. It involves earned discounts, and it is hiding in plain sight in agreements signed in the year leading up to June 1.
What your contract actually says
Open any recent FedEx Transportation Services Agreement. Find the Earned Discount Program Details. Look for the header that reads “Operating Companies included in the ED Calculation.”
The three names listed are FedEx Express, FedEx Ground, and FedEx LTL Freight.
The next line confirms that Annualized Transportation Charges are aggregated across the customer’s accounts. The contract is unambiguous on this point. Gross revenue from the freight business counts toward the same total that determines parcel earned discount tiers.
The tier structure makes clear where the economic value sits. The parcel earned discount bands deliver materially larger percentages, on materially larger revenue thresholds, than the LTL bands. The two scales are not comparable.
For most shippers, the freight contribution is not where the discount value lives. The freight contribution is what pushes them into the higher parcel tier.
The clause that survived the spin
Now find the section in your agreement, typically titled “Spin-Off.”
The clause was written with the divestiture in mind. It acknowledges that FedEx Freight is intended to become a separate, non-affiliated entity. It preserves the agreement against any non-assignment or change-of-control termination triggers. And it commits the agreement to continue in effect with FedEx Freight, Inc. as a newly formed independent entity.
What the clause does not address is whether the cross-company earned discount aggregation continues.
Why the silence is structural
The silence is not an oversight. It is the only possible outcome.
Once FedEx Freight is, in the contract’s own words, a separate, non-affiliated entity from FEC, there is no legal or operational basis for one public company’s revenue to count toward another public company’s discount tier program. The aggregation is mechanically impossible across two independent listed entities, regardless of what the rest of the contract says.
So the shipper who signed in 2025 is now in a contract that explicitly preserves itself across the spin and equally explicitly fails to preserve the one feature that made the parcel pricing work as well as it did.
The contract continues. The aggregation cannot.
What that looks like on your invoice
The consequence is immediate and quiet. The same parcel volume, against the same thresholds, now lands in a lower band. The contract did not change. The discount did. And the effective parcel cost rises without the carrier making a single move.
This is not a yield play by FedEx. It is a yield consequence of the spin-off itself. The math just changed underneath the agreement.
What to do this week
If you have a FedEx Transportation Services Agreement signed in late 2024 or in 2025, pull it now.
Read the spin-off clause alongside the Earned Discount Program Details. Confirm whether FedEx LTL Freight is listed among the operating companies in your ED calculation. Pull your annualized transportation charges for the trailing 52 weeks, broken out by operating company. Run your parcel-only revenue against the tier thresholds as if freight had never contributed.
Do not wait for the true-up.
The gap between what your historical combined revenue qualified for and what your parcel-only revenue qualifies for now is the size of the silent increase you have already absorbed. The longer you go without measuring it, the longer that increase compounds on every package you ship.
