Measures to contain the coronavirus are affecting FedEx shipping services to and from China.
FedEx Express’ international priority freight and international economy freight shipments to China are seeing longer transit times — ranging from one to three additional business days — due to coronavirus containment efforts, according to a company service alert.
Temporary service suspensions are in place for certain FedEx Express Europe-to-China services, including all international economy freight shipments, the Feb. 20 alert said.
More than 2,762 people have died from the China-concentrated coronavirus outbreak, and more than 81,000 cases have been confirmed as the virus has quickly spread beyond China.
FedEx was among the companies that saw their stock prices tumble early this week, attributed to worries over the continued spread of coronavirus. After closing at $163.25 per share Friday, FedEx stock was trading at $145.10 Wednesday afternoon.
The outbreak is rattling global supply chains, with both air and ocean freight shipments being hit by “unavoidable service impacts,” FedEx Logistics said in a separate service alert Monday.
Outbreak brings business risk
How much the coronavirus outbreak is affecting FedEx’s business is unclear, but the company is heavily tied to the world economy. FedEx said in a Jan. 31 economic update that the coronavirus outbreak is among the risk factors for global economic growth.
FedEx Express was already struggling before the coronavirus outbreak. The air cargo industry hit a rough patch in 2019, with the International Air Transport Association reporting air freight markets had their weakest year since 2009’s global financial crisis. Demand fell by 3.3% from 2018 to 2019 as global trade growth slowed.
Air cargo demand could rebound in 2020 as trade tensions between countries fade, according to the IATA.
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