E-commerce demand fuels FedEx revenues as it prepares for Covid vaccine

FedEx saw its revenues and profits improve in its fiscal first quarter as a surge in e-commerce demand propelled performance.

The express giant saw revenues for the three months ended August 31 increase by 13.5% year on year to $19.3bn, while net income was up 67.8% to $1.2bn and operating income improved by 62.5% to $1.6bn.

FedEx said that operating results increased due to volume growth at FedEx International Priority and US domestic residential package services, yield improvement at FedEx Ground and FedEx Freight, and one additional operating weekday.

These factors were partially offset by costs to support strong demand and to expand services, variable compensation expenses, and Covid-19 related costs incurred to ensure the safety of FedEx team members and customers.

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Source: Air Cargo News

Capacity crunch gives shippers a headache as US-Mexico trucking rates soar

US-Mexico trucking is no smoother since USMCA, the revised trade agreement between the US and its neighbours that replaced the NAFTA framework on 1 July, was roundly welcomed by trade groups.

It has not eased capacity problems on the US-Mexico border and trucking rates continue to go up as a rising tide of cargo is struggling to move.

And capacity is set to tighten further, which will push up rates even higher, warned Troy Riley, president of Redwood Mexico, a division of Redwood Logistics set up two years ago to provide cross-border solutions.

He added that overall lead times were likely to be stretched further as demand has been building in several sectors.

“The automotive and manufacturing sectors continue to drive increased demand for capacity in the market, as their production ramps up to pre-Covid levels.

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Source: The Load Star

As a K-Shaped Recovery Model Emerges, Consumer Spending Heavily Bifurcated

While not a large increase, a welcome one. According to Deloitte’s annual holiday, retail forecast holiday retail sales are likely to increase between 1% and 1.5%.

Overall, the consulting firm projects that holiday spending will result in sales between $1,147 billion and $1,152 billion during the November-January timeframe.

E-commerce sales are expected to grow by 25% to 35%, year-over-year, during the 2020-2021 holiday season, compared to sales increasing by 14.7% in 2019.

E-commerce holiday sales are expected to generate between $182 billion and $196 billion this season.

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Source: Material Handling & Logistics

Port of LA secures record month with 961,833 TEUs

The Port of Los Angeles had its best month ever in August, but Executive Director Gene Seroka wasn’t sipping champagne during Tuesday’s press conference on volumes.

“One month or even one quarter does not make a trend,” Seroka said. “Despite this import surge that we’re seeing, the U.S. economy and global trade face significant challenges. Cargo volume remains down nearly 12% year-on-year through August. The trade imbalance has deepened, with American exports continuing to struggle. In my view, our economy remains in a very precarious position.”

Still, the Port of LA processed a record-setting 961,833 twenty-foot equivalent units (TEUs) in August.

“This represents the best single month ever at the Port of LA, beating our October of 2018 number at more than 952,000 TEUs,” Seroka said.

The volume total was a 12% increase from August 2019 as well as July of this year.

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Source: American Shipper

Container volume at eight major Chinese ports up 7.4% in early September

Container volume at eight major Chinese ports increased 7.4% year-on-year in early September, according to the data released by China Ports and Harbours Association.

The ports of Shanghai, Guangzhou and Shenzhen all posted a growth rate of over 10%.

Cargo throughput of major coastal ports increased 9% year-on-year, and export cargo throughput increased 16.5% in early September.

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Source: Seatrade Maritime