UPS and FedEx Air Freight Hubs

Since the first flight took place by the Wright Brothers, the delivery of air cargo and freight has grown greatly. The first cargo flight was between Dayton and Columbus, Ohio in November 1910. The shipment was of very small proportions, just a bolt of silk, but the flight stayed in the records for its speed, an amount of time for delivery that couldn’t possibly be matched by train. That was the just the beginning of what was to come in the cargo airlines industry which has blossomed into United Parcel Service (UPS) and FedEx carrying much freight into and out of their main airline hubs in Louisville, KY and Memphis, TN, respectively. These two carriers account for more than 2/3 of the annual air volume.

Cargo deregulation in 1977 paved the way for unprecedented growth for air shippers. Between 1982 and 2000, the average annual growth rate for air shippers was 8% per year. Despite this growth, air freight still only accounts for roughly ½ of 1% of the total freight ton-miles transported in the United States. Water, rail, and truck account for 99.5% of total ton-miles shipped in the United States every year.

There are three market segments in today’s cargo industry: express, heavyweight, and mail transport. Express is a segment whose packages are time-definite and weigh less than 100 lbs. while heavyweight packages weigh greater than 100 lbs. Express cargo make up the greatest proportion of items shipped via air.

UPS ships 2.2 million packages and documents per day in the United States by air while this same information couldn’t be found for FedEx. They both employ an advanced sort system to separate, organize and ship packages by delivery location. UPS has 229 aircraft in its delivery fleet while FedEx has 669 aircraft. UPS serves more than 382 airports domestically while FedEx serves more than 375 worldwide.

References:

1.    http://ardent.mit.edu/airports/ASP_exercises/ASP%20matl%20for%20posting%202007/UPS%20and%20FedEx%20Hub%20Operations%20Cosmas%20Martini.pdf
2.    http://www.pressroom.ups.com/Fact+Sheets/UPS+Fact+Sheet
3.    http://news.van.fedex.com/files/factsheet_corporate.pdf
4.    http://news.van.fedex.com/files/June%202012%20FedEx%20Express%20Worldwide%2 0Fact%20Sheet.pdf

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