FedEx, China Southern Airlines to explore cargo cooperation

FedEx Corp. and the air cargo arm of China Southern Airlines last week agreed to strategically collaborate on ways to improve the efficiency and service capabilities of their air logistics networks by leveraging each company’s respective advantages and sharing best practices.

The companies signed a memorandum of understanding formally establishing a working relationship in Guangzhou, China, where China Southern Air Logistics is based and where FedEx (NYSE: FDX) operates a large hub.

Under the agreement, the companies will explore cooperation opportunities in several areas, including capacity sharing, routes, hub connections, network planning, fleet resources, ground operations and digitalization.

“By integrating FedEx global air network resources with China Southern Air Logistics’ operational experience in both domestic and international markets, we will further enhance route connectivity and operational efficiency,” said FedEx China President Poh-Yian Koh in a news release.

“Together, we will build a smarter, more agile, and more resilient air logistics ecosystem — better serving the growing cross-border logistics needs of Chinese customers and injecting new momentum into the smooth flow and development of the global supply chain.” FedEx is the largest cargo airline in the world by traffic and fleet size.

China Southern Airlines ranks in the top 10 carriers in the world by cargo traffic, according to the International Air Transport Association. China Southern Cargo operates 19 Boeing 777 freighters in addition to managing cargo carried in the belly hold of the parent company’s passenger planes.

FedEx has shifted some China outbound flights over the past year away from the United States and to Europe after the Trump administration’s tariff hike on Chinese goods, including e-commerce parcels, reduced U. S. import demand. FedEx is in the process of expanding and upgrading its Asia-Pacific hub at Guangzhou Baiyun International Airport.

The project, which is expected to be completed next year, will more than double the size of the original terminal and triple the parcel sorting capacity per hour Philippines In related news, FedEx last month broke ground on expansion of its Clark gateway facility in the Philippines to keep pace with growth in cross-border trade.

Once completed, the modernized terminal will span nearly 840,000 square feet and feature upgraded handling and operational capabilities designed to enhance regional capacity, shipment flow and service flexibility. Rival UPS is also expanding its air hub in the Philippines. Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves. com. RELATED STORIES: UPS projects to boost capacity at 3 Asia air hubs The post FedEx, China Southern Airlines to explore cargo cooperation appeared first on FreightWaves.