FedEx Corp.’s recent strategy to focus more on specialized services for companies in industrial sectors with complex logistics requirements, beyond basic parcel delivery, is paying dividends, especially in the aerospace and automotive sectors.
The freight transportation giant last week described how it secured a series of new customer wins after integrating disparate capabilities across global parcel, freight, freight forwarding, and trade compliance services under one umbrella, with dedicated teams able to develop customized solutions.
FedEx (NYSE: FDX), for example, created a dedicated logistics process for quickly and reliably moving aircraft engines and oversized aircraft components to help airlines complete maintenance, and minimize time out of service. Since June 2025, FedEx has transported hundreds of aircraft engines, according to a company news release. CEO Raj Subramaniam said during the third-quarter earnings call that engine moves increased 15-fold from prior levels.
Many large freight forwarders have so-called Aircraft on Ground logistics services that support aviation and aerospace companies, including overhaul facilities and suppliers, facing urgent operational disruptions. Speed is critical when an airplane is grounded in need of repair, a manufacturer is missing components to keep the assembly line running or a repair facility discovers unexpected damage during a scheduled maintenance check and doesn’t have the part on hand. Experts also say expediting an urgent shipment requires synchronization between logistics partners, the buyer and quality teams.
Demand for engine transport has increased in recent years as new-generation engines prove less durable and get removed from the wing to be sent to manufacturers for repair. Airlines are also keen to maximize fleet availability because supply chain and regulatory headwinds have slowed airframers ability to deliver new orders on time. That means airlines are holding on longer to aging aircraft, creating a greater need for specialized logistics support during unexpected aircraft downtime, critical parts shortages, unplanned maintenance events and other operational challenges.
Logistics companies with AOG desks offer around-the-clock access to dedicated teams that can quickly arrange transportation, make routing decisions and manage regulatory requirements for shipments under tight time pressure. Other advantages typically include the ability to follow customer-specific operating procedures; provide flexible transportation options, such as next-flight out, dedicated trucking, and charter flights; access to a global network of offices and facilities; and enhanced monitoring and customer communication throughout the shipment lifecycle.
Seattle-based Expeditors International last summer said it expanded its AOG services. Other companies with significant AOG logistics operations include Kuehne+Nagel and Ceva Logistics. In February, K+N acquired Ireland-based Eastway Global Forwarding Ltd., which specializes in AOG services, aircraft engine logistics, aviation logistics & warehousing, and customs brokerage services.
“When an aircraft engine needs to move, every hour matters and every detail counts,” Marcus Balzereit, the new president of FedEx Logistics, said in the news release. “A delayed engine can impact flight schedules, aircraft availability, maintenance schedules, and operational commitments across the aviation industry. With our own airline DNA, we understand firsthand the complexity and urgency behind keeping aircraft flying. Our solution brings together dedicated aerospace experts, digital innovation, and a proven global network to provide customers with the speed, visibility, and reliability they need to keep operations running efficiently.”
Balzereit was promoted Aug. 3 to lead FedEx Logistics, the freight forwarding unit at FedEx that manages shipments for customers using FedEx and third-party carriers. He previously was senior vice president of Asia Pacific sales and solutions.
His mandate is to deepen FedEx’s industry expertise and develop tailored solutions to help key B2B customers optimize supply chain operations, according to the news release announcing his appointment.
The aerospace support center, for example, manages all quotations for booking engines on freighter aircraft and oversees handling and transportation from origin to destination — much like any freight agent. Working closely with colleagues around the world, the experts provide centralized oversight, regulatory compliance, customs coordination and end-to-end accountability throughout a shipment’s journey. Complementing the process is a proprietary digital platform that streamlines quotation generation, automates communication and securely manages shipment documentation, FedEx said in last week’s news release.
Automotive and cloud computing
As part of the focus on high-margin, premium services, FedEx last year began offering more differentiated services for the automotive production market, with a dedicated team, 24/7 support, flexible global pickup capabilities, and enhanced visibility. The effort paid off in the third quarter when it began serving 13 major automotive customers, Chief Commercial Officer Brie Carere said on the earnings call.
The AI and data center industry was the fastest growing vertical at FedEx during the third quarter quarter. A recent Frost & Sullivan report, sponsored by FedEx, discussed how AI is influencing trade patterns in the Asia-Pacific region and trans-Pacific freight movements, which FedEx is capitalizing on.
Healthcare revenue grew by double digits in the quarter. In July, FedEx established a life sciences division to coordinate specialized healthcare logistics operations.
“Our expanding capabilities across key verticals are enabling us to address more of our customers’ logistic needs, unlocking air freight demand from traditionally parcel-centric customers,” Subramaniam said. “Differentiation is increasingly centered on deep customer relationships and tailored service experiences, positioning us to capture more freight volume as we address customers’ needs beyond parcel.”
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Write to Eric Kulisch at ekulisch@freightwaves.com.
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