May 17, 2020

Air freight downturn causes fall in FedEx's forecasts

ocean frieght
FedEx Express
Freddie Pierce
2 min
Air freight has decreased due to high fuel prices
Follow @WDMEllaCopeland Global shipping company FedEx announced cuts to its 2013 profit forecast on Tuesday, issuing a warning about the declining glo...


Global shipping company FedEx announced cuts to its 2013 profit forecast on Tuesday, issuing a warning about the declining global economy.

FedEx, the world’s second largest package delivery company, announced a fall in their net income for the first quarter, which has fallen by one percent over the last year, and warned that earnings could slide as much as six percent for the year.

The company blamed the decline on an increase in the use of Ocean freight and less expensive shipping methods, as cost-cutting demands mean customers are choosing the cheaper method of transport. More energy-intensive methods such as shipping by air are being constrained by the rising price of jet fuel, which pushes prices up for the end consumer.


“As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer.  “Meanwhile, our FedEx Ground and FedEx Freight segments performed well, with both improving their year-over-year operating margins.  We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes.”

The company are now planning to remove a “significant amount of cost” out of it’s Express air freight operation, according to reports. The FedEx express sector’s earnings fell by 28 percent along with a fall of five percent for US package deliveries. It is believed that much of the decline is due to a single customer – which FedEx did not name – shifting from express shipments to ground.

Overall, FedEx expects a share profit of $6.20 to $6.60 for the current fiscal year ending in May. FedEx is not the only courier to experience a fall in shares, as their larger rival United Parcel Service (UPS) dipped 0.9 percent, compared to a 2.6 percent drop for FedEx. The difference in the effect on the two companies’ could be attributed to FedEx’s larger focus on air freight, compared to UPS’s focus on trucking.

In an announcement on the same day, FedEx released a notice of increased shipping rates for FedEx express, which will rise by a net average of 3.9 percent for domestic, import and export services from the US. These charges will come into place as of January 7th 2013, and will be partially offset by adjusting the threshold at which the fuel surcharge begins. This will reduce the surcharge by two percent. 

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Jun 8, 2021

DHL Claim Multi-Sector Collaboration Key to Fighting COVID

3 min
Global logistics leader DHL’s new white paper highlights what supply chain professionals have learned one year into the pandemic

Since January, global logistics leader DHL has distributed more than 200 million doses of the COVID vaccine to 120+ countries around the globe. While the US and UK recently rolled out immunisation plans to most citizens, countries with less developed infrastructure still desperately need more doses. In the United Arab Emirates (UAE), which currently has one of the highest per-capita immunisation rates, the government set up storage facilities to cover domestic and international demand. But storage, as we’ve learned, is little help if you can’t transport the goods.


This is where logistics leaders such as DHL make their impact. The company built over 50 new partnerships, bilateral and multilateral, to collaborate with pharmaceutical and private sector firms. With more than 350 DHL centres pressed into service, the group operated 9,000+ flights to ship the vaccine where it needed to go. 


Public-Private Partnerships

With new pandemic knowledge, DHL just released its “Revisiting Pandemic Resilience” white paper, which examined the role of logistics and supply chain companies in handling COVID-19. As Thomas Ellman, Head of Clinical Trials Logistics at DHL, said: “The past one year has highlighted the importance of logistics and supply chain management to manage the pandemic, ensure business continuity and protect public health. It has also shown us that together we are stronger”. 


Multisector partnerships, DHL said, enabled rapid, effective vaccine distribution. While international scientists developed a vaccine in record time—five times faster than any other vaccine in history—manufacturers ramped up production and logistics teams rolled out distribution three times faster than expected. When commercial routes faced backups, logistics operators worked with military officers to transport vaccines via helicopters and boats. 


In the UAE, the public-private HOPE Consortium distributed billions of COVID-19 doses to its civilians as well as other countries in need by partnering with commercial organisations such as DHL. For the first time, apropo for an unprecedented pandemic, logistics companies made strong connections with public health and government.


“While the race against the virus continues, leveraging the power of such collaborations and data analytics will be key”, said Katja Busch, Chief Commercial Officer DHL and Head of DHL Customer Solutions & Innovation. “We need to remain prepared for high patient and vaccine volumes, maintain logistics infrastructure and capacity, while planning for seasonal fluctuations by providing a stable and well-equipped platform for the years to come”. 


How Do We Sustain Immunisation? 

By the end of 2021, experts estimate that we need approximately 10 billion doses of vaccines—many of which will be shipped to areas of the world, such as India, South Africa, and Brazil, that lack significant infrastructure. This is perhaps the greatest divide between countries that have rolled out successful immunisation programmes and those that have not. As Busch noted, “the UAE’s significant investments in creating robust air, sea, and land infrastructure facilitated logistics and vaccine distribution, helping us keep supply chains resilient”. 


Neither is the novel coronavirus a one-time affair. If predictions hold, COVID will be similar to seasonal colds or the flu: here to stay. When fall comes around each year, governments will need to vaccinate the world as quickly as possible to ensure long-term immunisation against the virus. This time, logistics companies must be better prepared. 

Yet global immunisation, year after year, is no small order. To keep reinfection rates low and slow the spread of COVID, governments will likely need 7-9 billion annual doses of the vaccine to meet that mark. And if DHL’s white paper is any judge of success, multi-sector supply chain partnerships will set the gold standard.

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