Brutal Volume Landscape Leads Air Carriers to Make Tough Choices

As the transportation industry faces yet another peak season that wasn’t, carriers are paying the price. Air carriers, which have seen especially low volumes compared to other freight sectors, are being forced to make difficult decisions. Both UPS and FedEx are trying to convince their pilots to seek employment elsewhere as the carriers attempt to streamline workforces. Read on to learn more about how carriers are taking on an especially difficult moment for the global supply chain. Here are the seven headlines you need to know in an industry that's always moving.

As Low Volumes Persist, UPS Streamlines Air Workforce

Facing stubbornly low air freight volumes, UPS is working to reduce the workforce in its air division. Roughly 200 of the carrier's senior pilots have accepted a voluntary severance package. This offer appears increasingly attractive as smaller regional air carriers search for pilots in a competitive labor market. 

“During the third quarter, average daily air volume was down 15.8% year over year, FreightWaves reports, citing a conference call between executives and analysts. The article, which explored the workforce streamlining taking place at UPS, went on to say: “The integrated parcel logistics provider said direct-to-consumer daily volume declined 13.4% compared to last year, while B2B volume was down 9%, and customers continued to shift volumes out of air to lower-priced ground transport.”

Brutal Air Market Pushes FedEx Express to Offload Pilots

The air division of FedEx, FedEx Express, is pushing frustrated pilots to take a job with American Airlines. The push comes as FedEx Express — and the parcel industry at large — endures significant declines in volume. Until Dec. 1, FedEx pilots who leave for American Airlines will be offered a $250,000 signing bonus.

“While I understand that this is not something that will appeal to every pilot, for those of you who are frustrated with current flight hours and career progression or have just been on the fence about available options, you may consider this unique opportunity enough of an incentive to make a move,” Pat DiMento, VP of flight operations and training, wrote to FedEx Express pilots in a memo obtained by Supply Chain Dive.

DHL Lowers Earnings Outlook Amid Grim Global Forecast

As the freight market continues to normalize in the wake of the COVID-19 Pandemic, carriers are paying the price. Bonn, Germany-based shipper DHL is seeing significant declines in volume, as well as freight rates. As a result, company leaders have lowered full-year earnings outlooks to fall between $6.6B and $7.5B. 

“The recovery of the global economy has failed to materialize so far, DHL CEO Tobias Meyer said in a press release. “However, through investments in growth areas of our global business, we are well prepared for the moment when the global economy recovers.”

New UPS Product Marks Carrier’s Foray into Supply Chain Management

UPS has unveiled a new product geared toward improving supply chain synchronization. Its Supply Chain Symphony platform integrates disparate supply chain components — such as shipping, warehousing, and inventory management — into a single cloud-based platform. 

“UPS Supply Chain Symphony delivers robust visibility across the UPS global portfolio of services so that our customers can view and orchestrate better outcomes,” Bill Seward, President of UPS Supply Chain Solutions, said in press release. “This unmatched connectivity allows UPS customers to easily see their inventory levels, predict potential problems, and make strategic decisions to improve their supply chain operations.  After extensive use by our customers across multiple industries, it is clear that UPS Symphony enables us to deliver even more of what matters.”

Postal Service Reports $6.5B Loss for FY 2023

The U.S. Postal Service has reported a significant loss in the fiscal year 2023 — $6.5 billion for the period ending Sept. 30. That’s $2 billion over its projected loss of $4.5B. Despite the significant discrepancy between expected and actual loss, Postmaster General Louis DeJoy remains optimistic. 

"Although we are just in the early stages of one of the nation's largest organizational transformations — which is improving our processing, transportation, and delivery operations — we are already providing more consistent, reliable, and timely delivery to America's businesses and residences," DeJoy said in a press release. "We are also addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue-generating strategies, including launching new products like USPS Ground Advantage. The whole organization is highly focused on implementation of the Delivering for America plan and creating a more effective, efficient, and competitive Postal Service to serve the nation far into the future."

Cargo Thefts Spiked in Q3

Cargo theft rates continued to rise throughout Q3 2023, soaring 59% year-over-year, with 692 thefts throughout the United States and Canada. Collectively, the thefts resulted in over $31.1B in losses. 

“During the third quarter of 2023, reported thefts increased in every event category,” according to a Supply Chain Quarterly article. “Documented strategic cargo theft events increased 430% year-over-year, and theft of a loaded conveyance such as a full trailer increased 4% year-over-year. These kinds of thefts were most common in California, Texas, Florida, Georgia, and Illinois.”

Major USPS Contractor’s Drivers Vote to Join Teamsters Union

Drivers at 10 Roads Express, a major contractor for the U.S. Postal Service, have voted to unionize with the International Brotherhood of Teamsters. The union now represents some 300 drivers throughout major hubs for 10 Roads Express, which employs more than 4,000 drivers. 

“We need this union to hold our bosses accountable on improving operations and showing drivers more respect,” Timothy Rozell, a driver who has been with 10 Roads for 14 years, said in a Teamsters press release. “As we fight for our first contract, we need to stick together and keep communicating. There is no going back. Solidarity is a full-time commitment.”

In a Down Market, Transportation Professionals Turn to Technology to Maximize Efficiency 

As the freight market continues to struggle, shippers are leveraging innovative strategies to increase efficiency in freight operations. With Intelligent Audit, shippers can access a vital suite of transportation software assets:

Get started with Intelligent Audit, and see what 25 years at the cutting edge of supply chain technology can do for your business today. 

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