FedEx to rely more on bellies

SHOULD forwarders worry about a new group of rivals for lift? The present overcapacity ensures there are no headaches about finding space, but the question arises just how big the appetite of the integrators for linehaul on commercial carriers is.
FedEx has led that charge, which formed one of the planks in the integrator’s plan revealed back in late 2012 to improve profit by US$1.7 billion over three years.
In light of the shift from premium express to deferred services, the company’s express division has borne the brunt of this initiative, tasked with a $1.55 billion improvement target through job cuts and the exit of fuel guzzling older freighters from the fleet. 
The integrator not only accelerated the retirement of older freighters, it also cut some longhaul frequencies. The beneficiaries of these moves have been passenger airlines.
FedEx management has been loath to reveal how much linehaul volume it has shifted to commercial carriers.
A conference call with analysts in the wake of the presentation of results for the quarter ended on 30 November saw several callers ask detailed questions about this only to be told that management was very happy with the balance of traffic on proprietary and commercial capacity.
Lately FedEx boss Fred Smith has been a bit more vocal on the use of third-party linehaul, indicating that this will continue to rise.
Read Ian Putzger’s full piece in Air Cargo News 5 May – Issue No.776
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