airscholar

Dear Cargo Pilots,

As a graduate researcher tasked to investigate the effects of fuel price volatility on the air cargo sector, I kindly ask for your input on this interesting topic. While there is a limited amount of academic literature on this topic, I have found that some of the more original and interesting research ideas can often be found by talking to industry practitioners. This is why I am reaching out to you.

I am mostly interested in the time period 2005-2010, as I am hoping to capture the effects of the 2008 fuel price spike.

Some of the things I am interested to find out are:

- Were there any changes to your network structure as a result of the fuel increases of 2008? Were certain routes added/dropped?

- Was there any change in the amount of flying contracted to feeder airlines?

- Were there any operational fuel conservation initiatives that began specifically as a result of the 2008 spike? (SE taxi, optimized climb/cruise/descent profiles, APU usage, etc)

- Any other operational/network impacts on your cargo airline (or other cargo airlines you are familiar with) that you felt were significant?


Thank you in advance for any input you are able to provide. I know you are all busy professionals but I truly appreciate your contribution.

Regards,
Airscholar


About the study: This research project was mandated by US Congress as part of the FAA Reauthorization Bill (SEC 808) and was awarded to a consortium of 3 research institutions (MIT-Berkeley-Virginia Tech). If you are interested in learning more, please PM me.

The Walrus

At Fedex, in general the price of fuel has changed the way of thinking at our Company. I have been here since 1997. During that time, time was money and fuel was an afterthought. If you took off late, you were encouraged to push it up to aircraft limits to make up the time. Now, we fly more often at a fuel efficient cost index and except the tardiness to a point. We have also instituted fuel savings programs (which may, or may not be accommodated ) and are seeing the company move to far more efficient equipment.

Twin Wasp

Company went out of business in 2008. While not totally fuel related, the cost of fuel was part of the problem.

Keep in mind there are two kinds of air freight. There are the express services and then there is heavy weight air cargo. Stuff that gets carried in the front door and stuff that gets dropped off in back. My background is in the backdoor stuff.

In the 70s, 80s and 90s there were three large cargo systems - Zantop in YIP, Emory in DAY and Burlington which started in FWA and ended in TOL. When the Air Force started winding down Log Air in the early 90s Zantop started shrinking and Connie bought the hub operations and moved them to HUF and when Kitty Hawk bought Connie they ended up in FWA. Emory shut down in 2001, KH in 2008 and BAX last fall.

Air cargo is a predictor of the economy. It tends increase before the economy as a whole picks up and will slow down before the economy tanks. In the domestic US market air cargo is a luxury. Most of the US economy is located east of I35. You can truck stuff DAL-BOS or MSP-ATL in two days or less for about 20 percent the price of air freight. When times are good folks will say, "Yeah, we can get that to you tomorrow morning, no problem." When a business starts watching their costs more closely they'll ask if Thursday afternoon is ok. During 2007 air cargo volumes started dropping as the economy slowed and the price of fuel increased. Sometime that summer our costs exceeded our income. The company added fuel surcharges which just drove more freight to trucks but management said they weren't going to subsidize customer's freight.

MaxKts

Are you sure you want to admit to that on a public forum?

FrankTheTank

High fuel prices are good for NOBODY!

DLax85

The events of 2008 (i.e. high fuel prices, and decreasing loads) were what drove FDX Mgmt to implement 4A2B in Feb 2009.

The loads bottomed out in Jun 2009 and solidly rebounded from there.

We "stayed" in 4A2B until Jul 2010 for other reasons.

airscholar

Thank you all for your replies. I really appreciate the input.



Have any of you witnessed any changes in FedEx's (or UPS) route structure in the past 7 years or so? In other words, has the rising fuel cost affected the strategy FedEx uses to move their air freight?

Have you see new flights being introduced or some flights eliminated?

Lastly, has there been any change in the amount/type of fling contracted out to feeder airlines?


I am trying to find what sort of network changes (if any) have resulted as a consequence of the 2008 fuel price spike (as well as the gradual increase from 2004-2008). This would not include fleet modernization plans, which have clearly been accelerated by the rising fuel costs.

Thank you in advance for any information.

Airscholar

TheFly

Are companies like Ameriflight considered regional cargo airlines?

Jetjok

The overnight air freight business is sort of unique in that when the price of gas goes up, the company, at least at FedEx, will tack on a fuel surcharge to the cost of shipping. Because of the time-sensitive nature of the business, it seems that most customers are ok with that. As well, unlike the people-carrying airlines, FedEx has very little domestic competition, so folks really can't shop around for the lowest rate. I'm not sure what UPS does, but I'd expect that they do exactly the same thing as FedEx. Really allows the company to absorb additional fuel costs much better than the people-carriers.

JJ

FlyBoyULD

The only competition FedEx has in the US anymore for a true domestic air freight product is UPS Supply Chain and DHL-ACS. DHL is only available to IAC's but the service comitment offered and and the service actually received is hardly ever promised. UPS Supply Chain doesn't service as many points as FedEx so it's the choice airline to use for forwarders.

If you need anymore info, PM me.