US supply chain strain: FAA flight cuts, cargo jet grounding hit US logistics; FedEx and UPS brace for holiday rush
The US air cargo industry is bracing for fresh turbulence as the Federal Aviation Administration’s (FAA) 10% reduction in flight capacity across 40 major airports collides with the grounding of UPS and FedEx’s McDonnell Douglas MD-11 fleets, deepening pressure on supply chains ahead of the crucial Thanksgiving and holiday shipping season.The FAA ordered airlines to cut domestic flight operations by 10% between 6 a.m. and 10 p.m. local time, citing air traffic controller shortages caused by the prolonged government shutdown, AP reported. The decision affects key hubs with major parcel distribution centres — including FedEx’s Memphis and Indianapolis bases and UPS’ Worldport hub in Louisville, Kentucky, where a deadly cargo plane crash this week killed 14 people, including three crew members.Both companies announced they were grounding their MD-11 aircraft “out of an abundance of caution”, removing a significant chunk of capacity — roughly 9% of UPS’ fleet and 4% of FedEx’s. The double blow has prompted concerns about rising strain on logistics networks just weeks before the peak shopping period.“This is such a stressful time for both companies,” said Patrick Penfield, supply-chain management professor at Syracuse University, quoted AP. “You’ve got a surge in demand, and then you just lost some of your capacity. They’re already scrambling, and now they’re going to scramble even more.” Penfield warned that shoppers could face delivery delays of up to two days in mid-December, urging consumers to order early.While most air freight is international — and thus largely unaffected by the FAA directive — the cutback in domestic passenger flights, which carry about 35% of global trade by value, is expected to cause short-term constraints.FedEx said it had made “operational modifications” to keep shipments moving “safely and swiftly,” while UPS assured customers that its network remains “safe, resilient and reliable.” Both carriers said most of their flights operate outside the restricted hours, reducing immediate impact on overnight deliveries.Still, industry leaders warned of ripple effects. Mike Short, president of global freight forwarder C.H. Robinson, said the reduction in commercial flights could tighten domestic air capacity and extend transit times. “Trucks and expedited ground networks can absorb some displaced volume, but not without challenges,” he said.Smaller high-value goods such as smartphones, chips and consoles rely heavily on air transport, and experts say those shipments may face mild disruption. However, ground transport networks are expected to offset part of the capacity loss for domestic parcels.“Air cargo depends on every part of the aviation ecosystem working in sync,” said Brandon Fried, executive director of the Airforwarders Association. “When capacity is cut and federal employees are stretched thin, the supply chain slows — and the longer this shutdown continues, the worse it will get.”Despite the turbulence, logistics experts say the sector has become more resilient and adaptive after years of pandemic-related shocks. “Airlines have become very good at consolidating loads and rerouting via secondary hubs,” said Eytan Buchman, chief marketing officer of Freightos. “In the near term, space may feel tighter, but this isn’t a one-to-one loss in capacity.”For now, industry watchers expect limited delays — but warn that if the shutdown drags into December, America’s holiday deliveries could face their biggest stress test in years.
