Air Cargo

Airlines | Airports | Express | Special project | Temperature-controlled

USPS switches from FedEx to UPS , seeking lower costs , longer reach

By William B . Cassidy

USPS volumes now handled by UPS generated $ 2 billion in revenue for competitor FedEx in 2023 . Gorloff-KV / Shutterstock . com

The US Postal Service ( USPS ) has named UPS its primary air cargo provider , ending a long-term relationship with FedEx . The switch comes as both UPS and FedEx reorganize behind the scenes and work to counter flagging volumes .

The USPS was FedEx Express ’ s largest customer , accounting for close to $ 2 billion in revenue in its last fiscal year , according to filings with the US Securities and Exchange Commission .

USPS is putting more emphasis on ground package delivery and its Ground Advantage service , introduced last July . The switch also highlights how UPS and FedEx are looking differently at the business they have , and the business they want , in a soft US and global package market .

As recently as its March 21 earnings call , FedEx had said it was working to renew its contract with the USPS , which expires Sept . 29 . Those efforts fell apart in late March , and top FedEx rival UPS announced its new agreement with USPS April 1 .

“ We have long said we would extend the contract with the USPS if we could agree to commercial terms in the best interests of FedEx shareholders ,” FedEx said in a statement . “ Although we were unable to reach mutually agreeable terms , we remain committed to delivering outstanding service through the completion of our contract .”

Following a transition period , UPS will become the USPS ’ s primary air cargo provider and move the majority of USPS air cargo in the US .

“ Together UPS and USPS have developed an innovative solution that is mutually beneficial and complements our unique , reliable and efficient integrated network ,” UPS CEO Carol B . Tomé said in a statement April 1 .

Mutually beneficial means lowering costs , said Satish

Asia air cargo block space sold out for 2024 as e-commerce fills export capacity

By Greg Knowler

All air cargo block service agreements ( BSAs ) from Asia to the US and EU for this year have sold out as the ongoing surge in demand for e-commerce floods China ’ s airport gateways , according to Taiwan-based forwarder Dimerco . The BSAs for 2024 were finalized in March , with forwarders moving quickly to secure space amid fierce competition from large Chinese e-commerce platforms or marketplaces such as JD . com , Alibaba , Shein or Temu .

“ This surge in demand is fueled by the optimistic outlook for the e-commerce sector , which signals a promising trajectory for the air freight market in 2024 ,” Kathy Liu , senior director of global sales and marketing at Dimerco , said in an early April market update .

Air freight volume posted an 11 % year-over-year increase in March , surprising air cargo analysts . It was the third consecutive month that annual growth came in at 11 %.

“ While this latest monthly data should be balanced against the lower base recorded in the corresponding month of 2023 , when we saw weakened global manufacturing activities , Q1 2024 has still seen a surprisingly busy air freight market ,” said Niall van de Wouw , chief air freight officer at rate benchmarking platform Xeneta .

“ The level of demand in the first quarter doesn ’ t indicate a market which is running out of steam so far ,” he added , with e-commerce growth “ showing no sign of abating on its most prominent lanes .”

Rates are below the levels seen at the same time last year but have continued to trend upward , especially to US

“ This surge in demand is fueled by the optimistic outlook for the e-commerce sector .”

destinations , shrugging off the post-Lunar New Year market slowdown traditionally seen in March .

Despite a steady injection of belly cargo capacity as passenger flights are reactivated , average spot rates from Shanghai to North America of $ 5.07 per kilogram at the

28 Journal of Commerce | April 22 , 2024 www . joc . com