FedEx’s operating income in the third quarter, ended Feb. 28, soared 50 percent to $962 million, mostly due to lower costs and programs that drive productivity.
The load planners at FedEx Express, for example, have figured out that moving the center of gravity 2 percent aft of an aircraft’s center could save $7.1 million when jet fuel is at $3.15 per gallon. How? Because a forward center of gravity causes the tail wing to produce downward lift, which then is compensated for by the aircraft’s main wings. A forward center of gravity increases drag up to 3 percent. Loading the aircraft with the most rearward permissible center of gravity can reduce drag 1.5 percent. Only about half of flights are loaded with a rearward center of gravity, but continued training of ramp agents is expected to improve that figure, according to the company’s blog.
Proper loading is just one way the Express division, using a cross-divisional approach, is able to reduce fuel burn and help the bottom line. Under the Fuel Sense program, which was started seven years ago when fuel prices were skyrocketing, small individual actions are encouraged to improve how the airline buys, plans and uses fuel. When small actions are mastered, they are implemented across the organization.
Engineering and load-planning units, for example, also recently launched an initiative to move to lighter-weight containers after determining that thicker aluminum sides and double-thick floors did little to prevent forklift damage and mitigate warping, while complicating management of unit-load devices that had to be matched to the type of freight being shipped. Warping, for example, was not significantly reduced with thicker floor panels, because the very nature of floor rollers in the air cargo environment will warp container bases naturally over time.
The FedEx team estimates that the fiscal year 2014 program to cut 25 percent off the ULD weight will save the company up to $7.6 million in fuel costs each year, once completed.
Reducing container damage is now focused on research into composite container technology, which should further reduce container weight again.
Over the years, small changes that have led to big improvements include:
- Pilots waiting to start their last engine during taxi out, or shutting the first one down while taxiing in rather than at the gate.
- Aircraft technicians connecting ground power to aircraft quickly to reduce the usage of auxiliary aircraft power at 10-times the cost.
- Aircraft dispatchers reducing the amount of optional fuel planned on every flight. Better planning the amount of fuel required, including for safety contingencies such as weather-related rerouting, rather than simply topping off the tanks, saves $1 million for every minute reduced across the fleet for a year.
- Ramp agents keeping the parking gates clear to allow taxiing aircraft to quickly pull into position and reduce idle time.
- Auto Verify, a tool that eliminates paper-load sheets and allows the use of handheld devices to scan containers into the aircraft, which reduces load time.
Since 2007, FedEx says it has saved 334 million gallons of fuel, equivalent to the amount of coal needed to power 270,000 homes for a year and enough to purchase four Boeing 777 freighters.
This commentary was published in the May 2015 issue of American Shipper.