The Big Three: DHL, FedEx and UPS (global express fleet – Part III)

Earlier this week, we began our four-part analysis of the worldwide express freighter fleet. Part I offers a look at the overall fleet of jet freighters used now by the integrated express operators, and how that fleet has changed over the years. Yesterday, in Part II we examined the fleets of relative newcomers to the industry, such as Amazon, SF Express, and YTO Cargo Airlines. Today, Part III continues with a company-by-company overview of the three largest integrators: FedEx, UPS and DHL. Tomorrow, we’ll conclude with a look at the ACMI operators that do much of the flying on behalf of the integrators. Fleet growth was not limited to the relative newcomers to the express industry – the freighter fleets in service for DHL , FedEx and UPS increased by 7.5%, 6.1% and 6%, respectively, since June 2018. With the exception of ACMI-leased capacity, FedEx and UPS added only production freighters during the period, whereas DHL added a mix of production freighters and conversions. FedEx, the largest freighter operator in the world by 160 freighters (and hundreds of turboprops operated by other carriers) added a net of twenty-six freighters to its fleet, bringing the total number of jets in service to 434. More than 25% of the FedEx fleet comprises of 757-200F, but the 767-300F fleet is catching up. With commitments for at least forty-eight 767-300Fs with Boeing, FedEx’s 767-300F will surpass its 757F fleet within three years. As 767-300Fs are added, older platforms in FedEx’s fleet are becoming less relevant. FedEx has downsized the number of A310-300Fs, MD-10-10Fs, and MD-10-30Fs operating in its network, as part of its fleet renewal plans. Although FedEx has long been planning to retire its 18-unit MD-10-10F fleet by the end of its 2021 fiscal year, no prior guidance for the retirement of its remaining A310-300Fs had been provided. During a call with investors to discuss FedEx’s 1QFY20 results, Fred Smith, chairman and founder, said the remainder of FedEx’s A310- 300Fs would likely be retired by year-end, “eliminating the fleet type.” In addition to the retirements, Smith also said the company was parking the equivalent of seven MD-11Fs this fiscal year, of which the company currently operates 57. FedEx has increased its 767-300F fleet from fifty-seven aircraft to seventy-seven and added nine 777Fs. In parallel, FedEx ended the ACMI lease of four 747-400ERFs that were previously operated for TNT Express. According to the integrator’s latest Stat Book, as of August 2019, FedEx was committed to purchase sixteen 777Fs. Following the recent delivery, 777F commitments stand at fifteen units. We note that this figure varies slightly from Boeing’s published order book, which shows a backlog of ten 777Fs for FedEx as of Aug. 31 or just nine as of early October, following the redelivery. The six commitments beyond those shown in Boeing’s order book likely exist as options. Turning to UPS, which boasts the second-largest of the express fleets, we see growth for both medium-widebody and large widebody freighters. UPS added to its fleet eight each of 767-300Fs and 747-8Fs since June 2018. And to meet that growth, there are many more freighters on the way, with an order backlog comprising of fifteen 747-8Fs and eleven 767-300Fs. In addition to the production freighters, UPS will dry lease at least four 767-300BDSFs from CAM. The last of the major express operators and the one with by far the most complicated fleet is DHL, which, through its own operations, joint ventures, and ACMI operations, offers express freighter service in North America, Europe, Latin America, the Middle East, India, and the Asia-Pacific region. DHL’s owned airlines include EAT Leipzig (formerly European Air Transport), DHL Air UK, DHL Airlines International Middle East, India-based Blue Dart Aviation and DHL Aero Expreso in Panama. DHL also has partial ownership in carriers such as AeroLogic, Air Hong Kong, Polar Air Cargo, Tasman Cargo, and Vensecar. Further, ACMI operations on behalf of DHL are undertaken by airlines including ABX Air, Air Ghana, Allied Air, ASL Group, ATI, Aviastar, Bluebird Nordic, Cargo Air, K-Mile, Kalitta Air, Raya Airways, Southern Air, and Swiftair. The exact number of freighters operated by or on behalf of DHL is difficult to determine, as the company does not publish detailed information on its air operations and declined to comment on our estimates. However, Cargo Facts believes the total number of freighters in DHL’s express network has increased by seventeen freighters since last year’s express fleet analysis. Notable additions to the fleet include five A330-200Fs previously operated by Qatar Airways, and the first three of at least fourteen 777Fs DHL has on order with Boeing as part of a deal announced last year at the Farnborough Airshow. Tomorrow, we’ll conclude our four-part series with a look at the ACMI operators that do much of the flying on behalf of the integrators.

The Big Three: DHL, FedEx and UPS (global express fleet – Part III)

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