Sellers Can Relax, American Airlines and Pilots Agree to Save Holiday Flights

Source: American Airlines

You may have read stories last week that American Airlines had a glitch in its scheduling system that allowed pilots to take days off over the holidays, leaving potentially thousands of flights without pilots.

The airline blamed the glitch on on a processing error and as soon as it realized it had a problem made some gestures to use reserve pilots and offer additional pay.

The Allied Pilots Association, the pilot’s union, did not agree with American Airlines that those remedies were proper under the contract its pilots have with American Airlines.

So for a couple of days, there was a bit of uncertainty how this might resolve, and while most new focused on canceled flights that might impact holiday travelers, there was also a potential threat to eCommerce.

USPS Uses Airlines to Transport Mail and Parcels

Unlike UPS and FedEx that operate a full fleet of planes, USPS relies heavily on third parties to move its mail and parcels. While in-state and regional mail is carried by trucks, the size of the U.S. makes it difficult to offer fast cross-country delivery unless mail and parcels are transported by air.

Source: FedEx

FedEx is by far the largest contractor of services for USPS, with the logistics company earning over $1.5 billion from the postal service to carry freight. This year, USPS extended its contract with FedEx to 2024.

But other airlines still play a major role in transporting mail and parcels for USPS. Data is from the Husch Blackwell report of Top U.S. Postal Service Suppliers for Fiscal Year 2016.

  • UPS ($168,962,861)
  • United Airlines ($161,130,527)
  • American Airlines ($86,349,134)
  • Delta Airlines ($72,008,892)
  • Alaska Airlines ($30,990,945)

USPS also contracts with several regional air cargo carriers and international carriers to transport mail and parcels.

Holiday Season is Difficult Time for Air Cargo

Every year we hear of one courier or another having issues with making last-minute deliveries due to a capacity shortage. Sometimes, weather adds to route cancellations, which stresses the system further.

Source: American Airlines

In comparison to FedEx, all other U.S. carriers, including UPS, are a far smaller piece of moving mail and parcels for USPS. But when the system is stretched to maximum capacity, any loss of air cargo space could impact shipments.

Virtually all Priority Mail shipments and many small 1st class parcels ship by air services. If American Airlines had to cancel flights, it could have negatively impacted the ability by USPS to transport packages to some destinations.

Amazon, which uses USPS for final mile deliveries, is mostly immune from this problem as they transport shipments to regional USPS mail handling facilities for final delivery.

So the brunt of this potential problem could have been the many sellers on eBay, Etsy, Bonanza, or those running their own eCommerce websites.

A one or two day delay due to an air cargo contractor having issues with flights in the summer is likely not the biggest deal. But during this time of the year, it would have added another headache for some sellers.

The potential problem appears solved, and USPS will have all the capabilities available to carry mail and parcels.

How reliant are you on expedited services like Priority Mail or 2 and 3-day services? Do you ever think about the impact of weather-related or other air freight disruptions? Drop us a line in the comments section below.

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