Air freight: Volumes fell by 19 percent in March 2020 due to a sharp reduction in passenger flights (which carry freight as belly cargo) and the drop in manufacturing in China. However, as shippers and governments turn to air cargo for essential goods, air freight rates have increased—some carriers are seeing delays with increased congestion at airports.
We can observe the impacts on freight capacity in three key global transportation segments ocean, land, and air.
Mid-April saw an increase in capacity, as well as a recovery in volumes transported (although they are still down, year-on-year). The overall reduction in capacity is greater than the net reduction in demand, which supports higher air freight rates.
The impact of COVID particularly for FedEx
The rise of digital native players in the transport of goods—both B2B and B2C—that are upending existing relationships and business models
In June 2019, FedEx announced it would no longer provide U.S. express delivery of Amazon packages. Amazon has its sights on logistics providers, too. It launched a new trucking service in May 2019 that lets other retailers use the service, not just Amazon, according to one publication.
FedEx ended a partnership with Amazon to supply the e-commerce company with ground delivery shipping after its current contract ended, the company confirmed to Bloomberg. This was the second contract with Amazon that FedEx allowed to end without renewal, following a similar decision in June 2019 that covered only Express air shipments. The new contract termination is more significant than the earlier one, in that it means FedEx will not be providing any last-mile delivery service for Amazon, the largest online retailer, in addition to its less sizeable Express air freight. FedEx previously said that Amazon actually makes up less than 1.3% of the shipper’s total revenue, as measured over the year that ended on December 31, 2018.
