FedEx and UPS have both seen their shipping volumes plummet as the economy nears collapse. The cargo market is rapidly imploding as shipping giants UPS and FedEx report precipitously declining package transit demand.
The number of package flights operated by both FedEx Express and UPS “significantly declined month over month in July,” according to Yahoo! Finance. This shows just how far the overall air cargo market has sunk since the spring of 2022 and the effect of efficiency initiatives the companies have undertaken in response to lower express volumes.
Since the spring of 2022, the overall cargo market has been waning. And the shipping industry’s response thus far has been to impose new efficiency initiatives to try to lower costs and accommodate smaller express volumes, according to a report by Natural News.
FedEx (NYSE: FDX) flew 9% fewer domestic flights last month than in June following small sequential gains the prior two months, with year-over-year flight activity down 14%, according to an analysis by investment bank Morgan Stanley. The year-over-year decline in UPS’ flight activity accelerated to 13% from 10% in June. UPS (NYSE: UPS) reduced July flights by 14% from June. Flight activity in May and June, by comparison, was relatively stable. –Yahoo! Finance
FedEx and UPS have both already declared they are reducing flight activity to make up for the lower volumes in parcel shipments. FedEx is also streamlining its air infrastructure as part of a “multiyear effort to take out structural costs and improve profit margins.”
Morgan Stanley only tracks domestic flights for express carriers, and the data show the difference in performance at Amazon as well. Amazon, which has slowed its private cargo airline’s torrid pace of growth but hasn’t made any large-scale adjustments to the fleet, has seen flight activity drop. Amazon Air dipped 2% month over month in July after being flat in June. Compared to last year, Amazon’s flight count actually increased 16%, three points better than in June.
This could be another sign of the crumbling economic state we find ourselves in.