FedEx has announced an expansion of its Intra-Asia air network with two new routes, adding crucial capacity for forwarders within the region. This strategic move is aimed at reallocating aircraft to areas with higher demand, as volumes from Asia to the United States decline under the weight of tariffs.
This development from FedEx follows a similar decision by its competitor, UPS, which also recently increased flight frequencies and repositioned larger freighters on select routes within the Asian market.
During an earnings call last month, FedEx (NYSE: FDX) executives revealed that the company had cut its freighter operations from Asia to the U.S. by 25% in the fiscal quarter ending August 30. The reduction was a direct response to high U.S. government tariffs imposed this year, which have dampened direct-to-consumer retail demand. The company reported a $150 million hit to its profits due to a drop in revenue from China, stemming from the elimination of the de minimis tax exemption for low-value e-commerce shipments, which now face double-digit import fees.
This past Tuesday, FedEx announced the launch of a weekly flight connecting Incheon International Airport (Seoul, South Korea) with Hanoi, Vietnam. From Hanoi, the flight continues to FedEx’s Asia-Pacific hub in Guangzhou, China—a critical transit point for flights across Asia and on to Europe. This new route is set to shorten transit times by one day for shipments from Northern Vietnam to destinations throughout Asia and Europe.
The express carrier also introduced a direct flight between Seoul and Taiwan, operating seven times a week to serve a key trade lane for high-tech and e-commerce products. FedEx stated this new service supports clients like CJ Olive Young, a leading South Korean health and beauty retailer, as it aims to penetrate new international markets.
According to spokesperson Jonathan Lyons, the Vietnam route utilizes a Boeing 767 freighter, while the Taiwan service primarily uses MD-11 aircraft, with a Boeing 777 operating on Sundays.
In a press release, Kawal Preet, President of FedEx’s Asia Pacific region, stated, “Asia’s trade landscape is evolving rapidly. We’re responding by strategically investing in our network to create stronger connections for businesses within the region and unlocking new pathways for growth, driven by the need to adapt to diversifying supply chains, rising regional economies, and an e-commerce landscape being reset by changing customer behaviors and market dynamics.”
FedEx explained that these new air freight routes address growing demand in a region experiencing robust e-commerce growth ahead of the year-end peak shopping season and shifting trade flows. High-value tech exports from Southeast Asia are also on the rise. According to a United Nations report, Intra-Asia trade accounts for nearly 60% of Asia’s total export value. Data from the Chinese government also indicates that ASEAN nations have emerged as China’s largest trading partners, with bilateral trade reaching $963 billion in 2024.
Recently, UPS (NYSE: UPS) added flights between Shenzhen, China, and Sydney, Australia, while also upgrading to a larger aircraft for its route between Hanoi and Shenzhen. Earlier this summer, UPS reported that volumes on the China-U.S. trade corridor had fallen by 35%.
Earlier this week, FedEx also announced a new air freight route between Dublin, Ireland, and Indianapolis in the U.S., targeting support for companies in the healthcare and medical device sectors. Early last month, the company initiated its first dedicated freighter flight to Saudi Arabia from the U.S. and Europe.
According to a prior report by FreightWaves, DHL Express has also witnessed a year-over-year decline of approximately 30% in volumes from China and Hong Kong to the United States.
Source: Phaata.com (According to Freight Waves)
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