Flight cuts from government shutdown strain a supply chain that’s already stretched thin

The Federal Aviation Administration’s announcement of a 10% reduction in flight capacity across 40 major U.S. airports has raised concerns about potential strain on air cargo operations as the holiday shopping season approaches.

The capacity reductions affect several airports housing critical package distribution centers, including Indianapolis and Memphis where FedEx maintains hubs, while UPS operates its largest hub, Worldport, in Louisville, Kentucky. The timing is particularly challenging as the industry still reels from this week’s deadly cargo plane crash at the Louisville facility.

In response to the crash that killed 14 people, including three pilots on a Honolulu-bound aircraft, both UPS and FedEx announced late Friday they are grounding their fleets of McDonnell Douglas MD-11 planes “out of an abundance of caution.” These aircraft represent approximately 9% of UPS’s fleet and 4% of FedEx’s fleet, creating additional pressure on cargo capacity.

Patrick Penfield, supply-chain management professor at Syracuse University, described the combination of flight reductions and MD-11 groundings as a “one-two punch” for cargo carriers.

“This is such a stressful time for both companies, and you’ve got this surge in demand and then you just lost some of your capacity,” Penfield said. “They’re already scrambling as it is during the holiday season, and they’re going to scramble even more.”

Penfield estimates it could take weeks for carriers to return their MD-11 fleets to service following thorough safety reviews. He warned that by mid-December, when shipping volumes peak, consumers might experience delivery delays of one to two days, recommending that holiday shoppers place orders early.

The FAA order directs air carriers at designated airports to reduce their total daily scheduled domestic operations between 6 a.m. and 10 p.m. local time by 10%. While not specifically targeting cargo flights, the reduction affects overall capacity since air freight moves both on dedicated cargo planes and in the cargo holds of passenger aircraft.

Both FedEx and UPS have emphasized they’ve implemented contingency plans to maintain service reliability. The companies noted that many of their flights operate overnight, outside the restricted window, providing some operational flexibility. They’ve also prioritized maintaining shipments of critical items like pharmaceuticals, medical devices, and essential manufacturing components.

“We’ve made the necessary operational modifications to meet the requirements so that shipments continue to move safely and swiftly through our network,” FedEx stated following the FAA order.

UPS echoed similar confidence, noting their network was designed “to be safe and resilient” and that they remain “confident we can keep delivering the reliable service our customers count on.”

Western Global Airlines, the only other U.S. cargo airline operating MD-11s according to aviation analytics firm Cirium, has 16 of these aircraft in its fleet, though 12 were already in storage before recent events.

The impact on the broader air freight market is expected to be nuanced. Mike Short, president of Global Forwarding at C.H. Robinson, suggested that while the 10% flight reduction will create “ripple effects,” the overall impact on air freight may be limited.

“Because most U.S. domestic air freight moves in the bellies of passenger aircraft versus cargo planes, reductions in commercial routes will tighten air capacity in those markets,” Short explained. “The domestic air market could see temporary constraints and longer transit times.”

Industry experts note that alternative transportation modes may absorb some displaced volume, particularly for domestic shipments. Trucks and expedited ground networks can handle certain categories of goods, though Short warned this shift would not come “without challenges given that short-term surges drive spot rate volatility and equipment repositioning.”

Products most vulnerable to disruption include high-value, compact goods typically transported by air, such as smartphones, semiconductors, gaming consoles, and electronic toys. Domestic overnight parcels may see less impact as trucking networks can provide backup capacity.

Brandon Fried, executive director of the Airforwarders Association, expressed concern that the flight reductions will compound disruptions already occurring across the aviation sector due to the ongoing federal government shutdown.

“Air cargo depends on every part of the aviation ecosystem working in sync,” Fried said. “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 these challenges, some logistics experts see potential for industry adaptation. Eytan Buchman of freight booking platform Freightos noted that carriers have developed significant flexibility after navigating five years of supply chain volatility.

“I’d expect carriers to prioritize high-yield lanes, route via secondary hubs, and shift some domestic legs to other modes when it makes sense,” Buchman said. “Near term, space may feel a bit tighter and schedules less predictable on some connections.”

As the peak shipping season approaches, the industry faces an unprecedented combination of challenges that will test the resilience of America’s logistics networks and potentially impact holiday deliveries.