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Higher costs hit FedEx profits

Express

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September 22, 2021

FedEx Corporation said its operating results for the first quarter ended August 31 were negatively affected by an estimated $450 million year over year increase in costs due to a constrained labor market and availability, despite an increase in revenue from $19.3 billion to $22bn. The higher costs were only partially offset by higher package and freight yields, increased international export express shipments and lower net fuel prices.

In addition, while commercial ground and US domestic express package volume increased year over year, continued supply chain disruptions have slowed domestic parcel demand compared to the company’s earlier forecast.

Chairman and chief executive officer Frederick W. Smith, said: “While we expect these conditions to continue near-term, we expect a gradual improvement in labor availability combined with our proactive revenue management actions to mitigate the ongoing impact of these headwinds on our results and position us for earnings growth in fiscal 2022.”

“The execution of our strategies continues to drive higher demand for our services, despite the disruptive impact of the pandemic to labor availability and global supply chains,” he added. “I am very proud of our team members around the world who continue to transport lifesaving vaccines and deliver urgently needed supplies to those affected by natural disasters like Hurricane Ida and the recent earthquakes.”

FedEx Freight first quarter operating results improved primarily due to the continued focus on revenue quality and cost management. FedEx Freight reported a record operating margin of 17.3% for the quarter, with average daily shipments growing 12% and revenue per shipment increasing 11%.

“The FedEx teams continue to diligently deliver for our customers under unique and challenging circumstances,” said president and chief operating officer, Raj Subramaniam. “The current labor environment is driving inefficiencies in the operation of our networks and significantly impacting our financial results. For the peak season ahead, service remains our focus and we are making investments in resources and capacity to meet our customer’s needs.”

FedEx Express, FedEx Ground and FedEx Home Delivery shipping rates will increase by an average of 5.9%, while FedEx Freight rates will increase by an average of 5.9% to 7.9% and, from November 1, 2021, a fuel surcharge will be applied to FedEx Express (U.S. domestic package and freight services), FedEx Ground and FedEx Freight shipments.

The company is reducing its earnings outlook to reflect first quarter results, which were lower than the company’s June forecast. As conditions during the first quarter were more challenging than anticipated and are now expected to extend longer, the revised outlook for the remainder of the fiscal year also reflects this.

FedEx has incurred and expects to incur significant expenses through fiscal 2022 from theintegration of TNT Express but does not expect to incur these as part of its continuing operations. These include professional and legal fees and other operating expenses.

Freight visibility firm adds parcels expertise

IT/Software

Chris Lewis

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September 21, 2021

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Freight visibility firm adds parcels expertise

Supply chain visibility specialist project44 has acquired Austin, Texas-based delivery experience management firm Convey, for £255 million. Project44 says the move extends its service to the last-mile sector, including parcel, and courier delivery, as well as return items.

The two companies say they can radically change the way companies view, learn, and react to downstream changes, such as shipping delays, or Covid-related worker shortages and port closures and the demand for total order visibility and the ability to get ahead of issues before they occur has never been greater.

Convey adds the ability to resolve parcel delivery issues through automated customer communication, allowing carriers and logistics service providers to spend less time working manually and more time focused on their core business.

Danish gateway signs Champ

IT/Software

Chris Lewis

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September 21, 2021

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Billund Airport in Denmark has signed up for Champ’s Cargospot Handling digital solution, moving away from a long-term provider. The solution will be used by its handling agent, Cargo Center Billund (CCB) as a step towards paperless handling of over100 airlines and 50 international forwarding companies.

Champ says that CCB can now take advantage of a range of devices, and reduce the inefficiency of using non-native operation systems. All data collected on the warehouse floor is now fed directly into its cargo management application.

The airport’s vice president of airfreight Jan Ditlevsen, said: “We and CCB are excited to offer a more seamless and streamlined experience for our customers through Billund Airport. We are thrilled to be using the latest technologies with Cargospot Handling and Mobile, which will accelerate the cargo processed through our warehouses and throughout the region.”

Director of global sales and account management at Champ Cargosystems, David Linford, added: “Our Cargospot Mobile solution offers ground handlers the ability to efficiently manage their cargo movement using commodity handset devices and real-time data synchronization to the Cargospot

Billund Airport in South Denmark is perhaps best known as the gateway to the Legoland theme park but is also the second largest airport in Denmark, handling over 74.000 tonnes of airfreight a year and 50 freighter flights operations per week, plus road feeders.

Shell sets out plan for 2 million tonnes of sustainable aviation fuel

Technology

Chris Lewis

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September 20, 2021

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Shell sets out plan for 2 million tonnes of sustainable aviation fuel

Global energy firm Shell says it wants to produce around 2 million tonnes of sustainable aviation fuel (SAF) a year by 2025 and have at least 10% of its global aviation fuels sales as SAF by 2030.

Two reports – Decarbonising Aviation: Cleared for Take-Off jointly produced by Shell and Deloitte and Decarbonising Aviation: Shell’s Flight Path – say that the industry needs more ambition to decarbonise. Aviation has often been considered a sector that will decarbonise later than others, but more ambitious efforts are required and investments must start sooner if SAF is to be adopted on a large scale within 15 years.

Choosing SAF as the primary means of decarbonisation has the advantage of avoiding the need to redesign aircraft or airport infrastructure. The uptake of certified carbon offsets must significantly increase in the short term, so they can play as full a role as possible in the early stages of decarbonisation.

When used neat SAF can cut life-cycle emissions from aviation by up to 80% and can be used immediately as a drop-in fuel, blended with conventional jet fuel.

In parallel, says Shell, there is a need to invest in less mature technologies like electric and hydrogen-powered aircraft, and for these to play a role in short-haul flights before 2050.

Launching the report, Shell Aviation president Anna Mascolo, pointed out that SAF currently accounts for less than 0.1% of the world’s use of aviation fuel. However; “With the right policies, investments and collaboration across the sector we can accelerate aviation’s progress towards net zero by 2050.”

Shell has already announced that it is investing in a new biofuels plant at its Rotterdam Energy and Chemicals Park. It currently offers SAF made by other companies.

It also offers certified nature-based carbon credits to offset emissions, and is exploring other ways to help aviation get to net zero, including hydrogen power.

Shell believes a comprehensive regulatory regime is needed to drive infrastructure development, new technologies and SAF production plants and is calling for ambitious and feasible SAF blending mandates.

www.shell.com/DecarbonisingAviation

Hong Kong carrier Cathay Pacific has pledged to use Sustainable Aviation Fuel (SAF) for 10% of its total fuel consumption by 2030. The airline says it has made pioneering efforts in supporting SAF development for more than a decade and, in 2014, was the first airline investor in Fulcrum BioEnergy, from which the airline has already committed to purchasing 1.1 million tonnes of SAF over 10 years, which will cover around 2% of its annual pre-Covid fuel requirements on an annual basis. Cathay Pacific expects to begin taking delivery of SAF produced by Fulcrum and using it on a wider basis for its flights departing the US from 2024 onwards, when Fulcrum can scale up its production.

Happy days are here again says Emirates

Airlines

Chris Lewis

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September 20, 2021

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Dubai carrier Emirates says it aims to restore its US services to nearly 80% of pre-Covid levels by October and to more than 90% by December with more connections to Boston, Dallas, New York, San Francisco, Seattle and Washington DC.

It says that passenger demand is growing on the back of rising travel confidence and the easing of international travel protocols.

From October, there will be 78 weekly flights to 12 destinations in the US with flights to Boston, Washington, San Francisco, Seattle and Dallas all up from four to five a week, to New York up from 18 to 19

Emirates says it has already restored pre-Covid frequencies to Chicago, Los Angeles and on the routes connecting Athens and Newark and Milan and New York.

The airline is planning to further supplement its capacity for the winter season with daily flights to Boston, Dallas, Houston, San Francisco, Seattle and Washington in addition to double daily flights to New York.It added that the ramp up of flights to the US will also provide increased connectivity and choice for cargo customers. During the pandemic, Emirates SkyCargo transported thousands of tonnes of PPE and other essential supplies including pharmaceuticals and vaccines on its flights around the world and, since January 2020, Emirates SkCargo has moved more than 250,000 tonnes of cargo to and from the US.

Elsewhere in the Americas, the airline will be operating daily flights to Sao Paulo from October and is increasing flights to Mexico City via Barcelona to five times a week. It has also enhanced its operations to European and African destinations.

Riga parcels carrier launches own freighters – and has US in its sights

Express

Chris Lewis

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September 20, 2021

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Riga parcels carrier launches own freighters – and has US in its sights

Lithuanian-based international parcel delivery company Venipak Group has launched its own direct freighter flight between Hong Kong and Riga and says it aims to add services to Mainland China and the US, as well as adding a route between Hong Kong and the US West Coast.
With Covid restrictions severely affecting passenger flights and shipping backlogs forcing businesses to shift from ocean to airfreight, Venipak chief executive Justas Sabliskas says “existing options at the moment just do not work. Many businesses suffer from irregular and disrupted delivery times, and direct long-distance shipping flights are a rarity for the region. All of this adds to the heightened strain.”
The new route is operated by a Boeing 737-800 BCF aircraft which can carry a wider variety of cargo than passenger aircraft including dangerous goods and heavy or non-standard dimensional cargo. Regular weekly schedules and fixed prices during the high season allow easier planning of budgets. Venipak says the flight was completely sold out in two days.
Riga International Airport board member Artūrs Saveļjevs added: “We are pleased that Venipak has chosen Riga International Airport as its home for air cargo services, and we can also mark Hong Kong on our direct cargo flight destination map. This confirms that the ongoing work to develop and strengthen the Airport’s cargo segment is a step in the right direction and that our customers appreciate the potential of Riga Airport as a Baltic air hub.”

Qatar Airways joins green group

Airlines

Chris Lewis

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September 20, 2021

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Qatar Airways has joined the International Civil Aviation Organization (ICAO)’s Global Coalition for Sustainable Aviation, the first Middle East carrier to do so.

It is committed to work with industry stakeholders, such as manufacturers, academia, governments and non-government organisations towards aviation decarbonisation and promoting sustainable air transport.

The Coalition is a forum through which stakeholders can develop new ideas and accelerate innovative solutions that reduce greenhouse gas emissions.

Qatar Airways group chief executive, Akbar Al Baker, said: “It is innovation that will drive the industry forward for a sustainable future. I strongly believe that the ICAO Global Coalition for Sustainable Aviation will allow industry-leading partners to pursue collaborative creation and drive innovation together. Qatar Airways is looking forward to being a strategic collaborator in the coalition. We expect to work together with other members in developing ideas and strategies to facilitate a further acceleration of innovative green technologies, taking us a step closer towards net zero emissions.”

Qatar Airways Cargo operates freighters to over 60 destinations via Doha as well as freight in the belly-hold deck of passenger aircraft. Its fleet includes two Boeing 747-8 freighters, 24 Boeing 777 freighters and six B777-300ER mini freighters.

DHL moves a million vaccines – but many more to go

Express

Chris Lewis

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September 16, 2021

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DHL moves a million vaccines – but many more to go

DHL says it has delivered over a billion Covid vaccine doses to more than 160 countries as part of the global roll-out. its DHL Global Forwarding and DHL Express arms have been tasked with transporting vaccines on multiple routes from Europe and other origins to countries across Asia Pacific, South America, and Europe and is also responsible storage and local distribution of the vaccines in several German states.

However, as outlined in its white paper “Revisiting Pandemic Resilience”, another 7-9 billion vaccine doses will be needed annually in the coming years to keep (re-)infection rates low and to slow down the pace of virus mutations as well as to contain seasonal fluctuations.

It is calling for the logistics infrastructure and capacity built up for the pandemic to be maintained.

Chief Commercial Officer DH, Katja Busch, commented: “Looking back at the state of emergency these past nine months, we are honored to be playing our part, seamlessly managing and executing multiple supply chain set-ups without cold chain interruptions or security incidents. We are working across multiple supply chain set-ups and managing direct distributions in certain countries. We implemented new, dedicated, and reliable services at an accelerated speed to ship the highly temperature-sensitive vaccines, as well as ancillary supplies and test kits.”

President of life sciences & healthcare at DHL Customer Solutions and Innovation, Claudia Roa, added: “Our advantage is that we already had a sophisticated network in place with the necessary healthcare expertise. This allowed us to react swiftly.”

Vice president of life sciences and healthcare, Thomas Ellmann, concluded: “The current Covid situation clearly demonstrates how collaboration across governments and NGOs, pharmaceutical companies, medical equipment manufacturers, and logistics companies is the only way to beat pandemics, both now and in the future.”

To facilitate a speedy roll-out of medication governments and industries should maintain “ever-warm” manufacturing capacity, blueprint research, production, and procurement plans, and expand local deployment capabilities.

Cool Chain seeks new members

Logistics

Chris Lewis

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September 16, 2021

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The Cool Chain Association (CCA) has launched a membership drive in its quest for a more quality-driven temperature-sensitive supply chain.

Welcoming over 60 delegates to its Seventh Global Perishables Conference held online on 15 September, it has created a new logo and website , the latter providing easy access to information about ongoing projects, as well as downloadable white papers and case studies.

CCA chairman Stavros Evangelakakis explained: “There has perhaps never been a more pressing time for our community to work together and drive quality in the temperature-sensitive supply chain. CCA provides a neutral platform to facilitate collaboration with the aim of reducing food loss and waste, as well as benefiting the pharma industry.

“Our new look is a reflection of our renewed vision to grow membership and drive quality-driven change in the industry.”

Secretary general and airline partner manager at SkyCell, Nicola Caristo added: “We welcome any suggestions for projects that will progress the ambition of the association to reduce waste and loss and improve the quality, efficiency, and value of the cool supply chain. It allows us to concentrate efforts and resources on specific topics and projects, whilst showcasing the benefits of joining the association.”

For more information on joining CCA or taking part in one of its programmes go to coolchain.org

To suggest a project for the Technical Committee, contact cca@meantime.global

New HQ for thermal packaging firm

Technology

Chris Lewis

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September 16, 2021

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Pharmaceutical thermal protection specialist Tower Cold Chain is opening a new global headquarters close to its existing premises in Theale, 30 minutes from London Heathrow Airport. The 26,000sq ft building will greatly expand Tower’s container conditioning and storage capacities and enhance its design, laboratory and testing including an Innovation Centre.

The UK headquarters will also support Tower’s growing global network in the US, Europe, Asia-Pacific, India and South Africa improving both proximity and availability of containers.

The company says it was one of the first to adopt phase-change materials to protect temperature-sensitive materials, as well as developing a patented built-in data logger for its products. More recently, it introduced a range ofbiotechnology deep frozen pack-out solutions. In its last 15,000 shipments, the company has recorded fewer than 0.1% temperature excursions.