Bad weather and employees calling in sick is putting pressure on the US operations of global freight business FedEx. A shortage of ground workers and aircraft crews is forcing FedEx to implement contingency plans, including transporting air freight by road.
Limited air cargo capacity at FedEx
FedEx says it is adjusting operations to minimize delays. Those adjustments have included pausing, prioritizing, and/or deferring some deliveries. FedEx says its air cargo capacity remains limited, and they are adjusting networks to better enable the continued delivery of goods and services.
“The explosive surge of the COVID-19 omicron variant has caused a temporary shortage of available crew members and operational staff in the FedEx Express air network,” says FedEx in a service advisory issued on Tuesday.
“Additionally, severe winter weather across the country has placed a strain on operations. Volume currently moving through the network will be prioritized for processing.”
Memphis-based FedEx operates a large fleet of aircraft worldwide, including from its US hub airports in Anchorage, Dallas Fort Worth, Greensborough, Indianapolis, Memphis, Miami, Newark, and Oakland.
FedEx’s aircraft are a familiar sight at hundreds of airports, but a combination of bad weather and omicron is forcing the company to look at alternative methods to deliver freight. However, while FedEx cannot do much about the weather, its labor pool is a more controllable variable.
FedEx wasn’t counting on omicron sending so many workers home
The worker shortage at FedEx is a long-running problem. Six months ago, FedEx President and COO Raj Subramaniam acknowledged the problem. Competition from other freight companies for workers was also adding to the labor shortage.
However, just before Christmas, FedEx said it had hired 60,000 workers since September to plug labor holes inside the company. Raj Subramaniam said the business now was well-positioned to handle the busiest freight volumes, and the hiring spree would continue.
But the FedEx President wasn’t prepared for omicron and the numbers of workers infected or staying home because family members or co-workers were infected. As a result, FedEx cannot crew many of its timetabled services.
Factor in the bad weather, and it is a disruptive mix. The disruptions are not only impacting FedEx. Passenger airlines around the US have spent much of January canceling flights because of weather and crew shortages. Airlines have canceled thousands of flights since the Christmas period. Many of those airlines are now proactively trimming their forward schedules.
Capacity cuts elsewhere put added pressure on FedEx
Nearly two years after the onset of COVID-19, global supply chains still have not adjusted. When Alaska Airlines recently cut its schedules by 10%, that’s 10% less belly-hold space across their network to fly freight. It puts more pressure on supply chains and other airlines to take up the slack.
Elsewhere, quarantine requirements in Hong Kong forced Cathay Pacific to suspend its cargo flights for a week earlier this month, and it will now only operate freight flights at about 20% of its pre-COVID levels.
As other airlines cut capacity, businesses needing to fly freight rely increasingly on companies like FedEx, putting that under pressure business under more pressure.
Meanwhile, competitor United Parcel Service (UPS) appears to have so far dodged the omicron bullet. They are also hiring more workers and sending home workers showing signs of illness. However, UPS says its operations have not been seriously disrupted to date.