U.S. parcel delivery giant FedEx said that it hasn't seen much of a shift to air freight due to disruptions in the Red Sea that have tacked on nearly two weeks to shipping transit times.
"Shipping over the ocean makes up 90% of global commerce so even a small change would have an impact, but we haven't seen much yet," CEO Raj Subramaniam said at the National Retail Conference on Sunday. Subramaniam, who took over the reins as CEO in June last year, said air freight rates have remained stable.
Iran-backed Houthi militia attacks on container ships in the Red Sea have forced some retailers to stock up on goods before China's Lunar New Year holiday by seeking air or rail alternatives to transportation via the Red Sea in a scramble to avoid empty shelves this spring, executives and experts told Reuters.
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