Air express sector lagging
Air express and heavy freight carriers have yet to show any sustainable signs of a recovery, according to one Wall Street report.
Air volumes for United Parcel Service were down approximately 5% in May, compared with the same month in 2001, according to preliminary data from the Morgan Stanley Air Express Demand Index.
While some of that decline may reflect traffic diversions due to uncertainty over United Parcel Service’s prospects for reaching a settlement with the Teamsters before the current contract expires on July 31, Jim Valentine, a Morgan Stanley analyst, said anecdotal evidence suggests industry-wide volumes weren’t much better in May and continue to lag into the month of June.
Valentine said he did not have enough data on FedEx Corp. to offer a specific projection on its traffic volumes, but said a large third-party logistics provider that is a FedEx customer had told him that it saw no material pickup.
The analyst noted that high-tech and telecommunications – the two sectors that drove the growth of the air express industry between 1997-2000 – have yet to show signs of recovery.
The U.S. Postal Service apparently isn’t faring any better than its competitors in the private sector, Valentine added. Priority Mail and Express Mail traffic each declined 9% in the quarter ended May 17, he said, citing Postal Service data.
