All articles tagged with #air cargo
The FAA has reduced flight capacity by 10% at 40 major U.S. airports, impacting domestic air cargo and coinciding with the grounding of UPS and FedEx MD-11 fleets following a deadly crash, which may cause delays during the holiday season despite contingency plans by logistics companies.
Fred Smith founded FedEx in 1973, transforming it from a small startup into the world's largest cargo airline through strategic aircraft acquisitions, innovative fleet management, and industry advocacy, until his death at age 80. The company now employs over 500,000 people, operates a vast fleet, and facilitates global commerce, with Smith's hands-on leadership and vision being central to its success.
FedEx and USPS have ended their longtime contract, with UPS set to become the primary air cargo provider for USPS after FedEx was unable to reach an agreement to extend its contract. FedEx will continue to provide air transportation services until the contract expires on September 29, and the financial terms of the new deal between UPS and USPS have not been disclosed.
UPS has secured a new air cargo contract from the United States Postal Service, expanding their existing partnership and making them the primary air cargo provider for the postal service in the U.S. The financial terms of the deal were not disclosed.
The United States Postal Service has chosen UPS as its primary air cargo provider, ending its contract with FedEx in a move to reduce costs by $3 billion over the next two years. While financial terms were not disclosed, UPS will handle the majority of air cargo for USPS following a transition period, as USPS aims to transition from air freight to ground transportation to lower costs. This decision comes as global air cargo shipments have been rising, with UPS's stock rising nearly 2% and FedEx's falling 2.1% in response to the news.
UPS will replace FedEx as the primary air cargo provider for the United States Postal Service after a 20-year partnership, with the majority of air cargo in the U.S. for USPS being moved by UPS following a transition period. Financial terms of the deal were not disclosed, and FedEx's current air cargo contract with USPS is set to expire in late September. USPS is looking to reduce transportation costs by transitioning from air freight to ground transportation, while global air cargo shipments have been rising. UPS's stock rose nearly 2% before the opening bell Monday, while FedEx's stock fell 2.1%.
UPS will replace FedEx as the United States Postal Service's primary air cargo provider, ending FedEx's more than 20-year partnership with USPS. The financial terms of the contract were not disclosed, but UPS described the award as "significant." FedEx's shares fell nearly 2% following the announcement, and the company stated that its profitability would improve in fiscal 2025 despite the loss of the contract. USPS' payments to FedEx shrank to about $1.7 billion in fiscal 2023, from $2.4 billion in fiscal 2020, as the agency reorganizes its operations to accommodate changes in customer behavior and demand.
UPS secures a contract to become the primary air cargo provider for USPS, expanding their existing partnership and taking over from FedEx. The financial terms of the deal were not disclosed, and FedEx's current air cargo contract with USPS is set to expire in late September. USPS aims to reduce transportation costs by transitioning from air freight to ground transportation, while global demand for air cargo continues to rise. UPS stock rose nearly 2% following the announcement, while FedEx's stock fell 2.1%.
United Parcel Service (UPS) will replace FedEx as the United States Postal Service's (USPS) primary air cargo provider, as FedEx announced the end of its more than 20-year partnership with USPS. The financial terms of the contract were not disclosed, but UPS described the award as "significant." FedEx's stock fell 1.6% following the announcement, while UPS' shares rose 1.8%. The change in providers comes as USPS reorganizes its operations to accommodate customers adopting strategies similar to Amazon's, which require less reliance on air services for fast deliveries.
Airlines such as Delta, United, and American are experiencing a significant decline in cargo revenue, with year-over-year declines of about 40% in the second quarter. However, this decline is actually good news for the travel industry as it indicates a strong recovery in travel demand. During the pandemic, cargo revenue helped prop up airlines' revenue, but as travel demand rebounds, the business impact of cargo has faded. The increase in passenger capacity and the resurgence of travel have prompted airlines to add back service, which in turn boosts the supply of space to fly cargo. This, combined with waning demand for air cargo, has led to a decrease in shipping rates. Airlines are planning to expand flights to capitalize on the strong international travel demand, potentially further driving down cargo revenue.