FedEx Expects $175M Hit From MD-11F Grounding
US logistics giant FedEx expects to incur approximately USD 175 million in additional costs during the peak shipping season as a result of the temporary grounding of its MD-11F freighter fleet at FedEx Express, according to chief financial officer John Dietrich.
Speaking about the financial impact, Dietrich said the bulk of the additional costs will be concentrated in December, traditionally the busiest and most expensive period for air cargo operations. He noted that USD 25 million in incremental costs were already incurred in November, with significantly higher expenses expected in December due to the need to source outsourced lift while the company’s own aircraft remain grounded. Outsourcing capacity during peak season typically comes at a premium, further amplifying the cost impact.
FedEx expects its MD-11F fleet to gradually return to service during the company’s fiscal fourth quarter, which runs through May 31, 2026. The temporary grounding followed heightened safety scrutiny after the crash of an MD-11F freighter operated by UPS Airlines shortly after departure from Louisville Muhammad Ali International Airport in early November.
At the time the grounding decision was taken, Raj Subramaniam, president and chief executive of FedEx Corporation, said that 25 of the company’s 34 MD-11Fs were actively operating within the network. He explained that FedEx’s network planning team moved quickly to implement contingency measures aimed at protecting customer commitments and stabilising operations during the critical peak period.
Those measures included shifting a greater share of domestic freight to trucking within the United States, as well as adjusting flight schedules and capacity deployment across the wider air network. While these actions helped maintain service continuity, they also contributed to higher operating costs.
The disruption has affected the wider cargo aviation sector. Both FedEx and UPS have been forced to secure alternative aircraft and ground transport capacity at short notice. UPS, in particular, has entered into wet-lease agreements with carriers including 7 AIR, Kalitta Charters II, and Cargojet Airways.
According to ch-aviation data, the MD-11F is currently operated by just three airlines worldwide: FedEx Express with 58 aircraft, UPS Airlines with 26, and Western Global Airlines with 14. Western Global has been particularly exposed due to the aircraft type representing a large share of its fleet, forcing rapid pilot headcount reductions.
FedEx plans to retire its MD-11F fleet by the end of 2032, but the current grounding highlights the operational and financial risks associated with ageing widebody freighters during peak demand periods.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com