FedEx, UPS Buy Aging Jets to Offset 17-Hour Daily Ground Idleness

Wendover Productions

Express carriers purchase cheap, fuel-thirsty older aircraft because midnight-to-dawn sorting windows limit daily flight time to two hours, making expensive new airframes financially unviable.

AI-assisted summary of How Overnight Shipping Works — original source. Check the original for full context.

Source published: 2018-02-13

Key ideas

FedEx operates the world's largest cargo airline with 650 aircraft serving 400 destinations, transporting 6 million packages daily across a global network centered on nocturnal sorting hubs. (0:00)
Memphis and Louisville serve as the primary megahubs for FedEx and UPS due to their proximity to the U.S. mean population center, making Memphis the world's second-busiest cargo airport. (1:51)
Anchorage, Alaska functions as the world's fourth-busiest cargo airport by transforming mandatory transpacific refueling stops into active customs and package-sorting exchanges. (4:37)
Express cargo aircraft operate on an unusual fleet economics model, flying as little as two hours per day and sitting idle for over seventeen, making cheap, end-of-life airframes financially optimal over expensive, fuel-efficient new jets. (7:12)

Detailed notes

## Background Published on February 13, 2018, by Wendover Productions on YouTube, this video explores the global logistics and operational systems behind overnight shipping. The video description provides promotional links for Squarespace, channel merchandise featuring a new logo, Wendover's sister channel Half as Interesting, and various social media platforms.

## TL;DR The video breaks down how major express couriers like FedEx, UPS, and DHL deliver packages across massive distances overnight while the world sleeps. It explores how mega-hubs like FedEx's Memphis SuperHub exploit the United States' mean population center to execute rapid midnight sorting waves, complemented by secondary hubs and strategic crossroads like Anchorage, Alaska. Finally, it analyzes the unique fleet economics of cargo carriers, explaining why freight networks purchase older, low-cost aircraft to maintain profitability despite low daily utilization, and notes Amazon's emerging entry into the sector with Prime Air.

## Atmosphere & style The presentation carries Wendover Productions' signature analytical, intellectually curious tone, balancing rapid-fire delivery of staggering statistics with engaging visual metaphors. It feels informative and methodical, demystifying a hidden logistical marvel through clear geographic diagrams and economic rationale. The pacing is crisp and educational, leaving the viewer with a sense of awe toward the invisible, highly coordinated overnight machinery powering global commerce.

## Bulletin - [00:00](https://www.youtube.com/watch?v=y3qfeoqErtY&t=0s) FedEx operates the world's largest cargo airline with 650 aircraft serving 400 destinations, transporting 6 million packages daily across a global network centered on nocturnal sorting hubs. - [01:51](https://www.youtube.com/watch?v=y3qfeoqErtY&t=111s) Memphis and Louisville serve as the primary megahubs for FedEx and UPS due to their proximity to the U.S. mean population center, making Memphis the world's second-busiest cargo airport. - [04:37](https://www.youtube.com/watch?v=y3qfeoqErtY&t=277s) Anchorage, Alaska functions as the world's fourth-busiest cargo airport by transforming mandatory transpacific refueling stops into active customs and package-sorting exchanges. - [07:12](https://www.youtube.com/watch?v=y3qfeoqErtY&t=432s) Express cargo aircraft operate on an unusual fleet economics model, flying as little as two hours per day and sitting idle for over seventeen, making cheap, end-of-life airframes financially optimal over expensive, fuel-efficient new jets.

## Key takeaways - [00:00](https://www.youtube.com/watch?v=y3qfeoqErtY&t=0s) Major shipping couriers operate at a scale rivaling or surpassing passenger airlines, with FedEx owning more aircraft than Emirates, Etihad, and Qatar Airways combined. - [00:35](https://www.youtube.com/watch?v=y3qfeoqErtY&t=35s) DHL delivers to every single country on Earth, including North Korea, while UPS serves more than twice the destinations of the largest passenger airline. - [01:51](https://www.youtube.com/watch?v=y3qfeoqErtY&t=111s) Memphis, Tennessee was selected as FedEx's SuperHub because it sits roughly 200 miles from the U.S. mean population center in Wright County, Missouri, minimizing average flight times nationwide. - [02:40](https://www.youtube.com/watch?v=y3qfeoqErtY&t=160s) Between 10:00 PM and 1:00 AM, roughly 150 FedEx aircraft arrive in Memphis, where automated systems sort and repack packages into outbound containers in as little as 15 minutes. - [03:42](https://www.youtube.com/watch?v=y3qfeoqErtY&t=222s) A spoke-and-feeder network using small turboprop aircraft delivers freight from regional hub airports to remote towns that cannot support mainline jets. - [04:37](https://www.youtube.com/watch?v=y3qfeoqErtY&t=277s) Secondary hubs like Oakland eliminate operational waste by bypassing Memphis for high-volume regional routes, saving thousands of miles of jet fuel on intra-West Coast shipments. - [05:50](https://www.youtube.com/watch?v=y3qfeoqErtY&t=350s) Anchorage sits directly on the great-circle route between North America and Asia, allowing couriers to sort and consolidate freight while avoiding the payload penalties of nonstop transpacific flights. - [07:12](https://www.youtube.com/watch?v=y3qfeoqErtY&t=432s) Because express courier schedules are dictated by tight overnight sorting windows, cargo planes average roughly two hours of daily flight time compared to 12+ hours for commercial airliners. - [08:20](https://www.youtube.com/watch?v=y3qfeoqErtY&t=500s) To offset extreme daily idleness, express couriers primarily purchase heavily discounted, retired passenger aircraft like Airbus A300s, where low capital cost outweighs higher fuel burn. - [09:20](https://www.youtube.com/watch?v=y3qfeoqErtY&t=560s) New freighters like the Boeing 747-8 are reserved exclusively for high-utilization, long-haul international routes where fuel savings justify large capital investments. - [09:45](https://www.youtube.com/watch?v=y3qfeoqErtY&t=585s) Amazon is one of the few entities capable of challenging established couriers by generating sufficient internal shipping demand to justify launching its own dedicated Prime Air network.

## Detailed walkthrough ### [00:00](https://www.youtube.com/watch?v=y3qfeoqErtY&t=0s) The Scale and Magic of Overnight Logistics

Overnight shipping represents a quiet marvel of modern logistics operating while the world sleeps. While not cheap, the speed achievable across global distances defies intuition: a package sent from Miami, Florida on a Monday night can be in Anchorage, Alaska by 8:30 AM on Tuesday. Even an international parcel shipped from Edinburgh, Scotland on a Tuesday can arrive in Anchorage by 9:00 AM on Wednesday morning. As the narrator puts it, “The speed and efficiency of these worldwide delivery networks is mind-blowing and it all happens while we sleep.”

Three primary courier giants dominate consumer shipping: FedEx, DHL, and UPS. Each maintains astonishing operational numbers: - **FedEx**: Possesses more aircraft than Emirates, Etihad, and Qatar Airways combined, operating 650 planes serving 400 destinations and transporting 6 million packages every single day as the world's largest cargo airline. - **DHL**: Delivers to every single country on Earth, including North Korea. - **UPS**: Flies to more than double the number of destinations served by the world’s largest commercial passenger airline.

All three couriers operate hundreds of nighttime flights centered around specialized hub airports that act as high-speed sorting nodes. FedEx operates global hubs in cities like Singapore, Guangzhou, Shanghai, Seoul, Osaka, Anchorage, Oakland, Dallas, Indianapolis, Greensboro, Miami, Newark, Toronto, Paris, Cologne, Milan, and Dubai.

[01:51](https://www.youtube.com/watch?v=y3qfeoqErtY&t=111s) The Heart of the Machine: The Memphis SuperHub

Despite FedEx's sprawling international footprint, its primary nerve center is the SuperHub located in Memphis, Tennessee. Memphis is not particularly large, with a population of only around 650,000, and it is not the exact geographic center of the United States. However, it sits roughly 200 miles from Wright County, Missouri, which marks the mean population center of the United States—the mathematical average location of every US resident. This geographic placement ensures FedEx can reach the maximum number of people within the shortest possible flight window. For nearly identical reasons, UPS built its primary hub, Worldport, nearby in Louisville, Kentucky.

The physical scale of these operations dwarfs standard passenger aviation facilities. At both Memphis and Louisville, the commercial passenger terminals are tiny enclaves compared to the colossal cargo footprints. In Louisville, passenger airlines do not even offer non-stop flights to the US West Coast, yet UPS flies directly from that modest city to five separate continents. Memphis operates as the second-busiest cargo airport in the entire world, surpassed only by Hong Kong and outpacing global mega-hubs such as Tokyo, Paris, Dubai, and Shanghai.

```mermaid flowchart TD accTitle: Overnight Flight Wave at Memphis SuperHub accDescr: Incoming flights land late at night, unload packages for rapid sorting, and reload onto outbound flights before dawn.

subgraph Inbound["Inbound Wave (10:00 PM – 1:00 AM)"] F1["~150 Planes Land from Across the Globe"] end

subgraph Sorting["Automated Sorting (~15 Minutes)"] F1 --> S1["Unloaded into Automated Sorting Facility"] S1 --> S2["Sorted & Dispatched to Outbound Staging Areas"] S2 --> S3["Repacked into Flight Cargo Containers"] end

subgraph Outbound["Outbound Wave (2:00 AM – 4:00 AM)"] S3 --> O1["Planes Depart Across North America"] O1 --> O2["Arrival at Destination Cities by 6:00 AM"] end ```

Every night between 10:00 PM and 1:00 AM, roughly 150 FedEx planes land in Memphis from all corners of the globe. Ground crews immediately offload the containers, feeding packages into an automated sorting network. Within just 15 minutes, any given item completes its sort, reaches its staging area, and is repacked into containers for its next flight. Outbound departures begin launching at 2:00 AM and run through 4:00 AM, guaranteeing aircraft touch down across the United States by 6:00 AM.

For remote destinations where freight volume does not justify a mainline jet, FedEx relies on a spoke-and-feeder network using small turboprop aircraft. In Presque Isle, Maine—a town of only 10,000 residents—mainline jets cannot be filled. Instead, larger flights from Memphis land early in the morning at regional hubs like Manchester, New Hampshire and Portland, Maine, where cargo bound for northern New England is transferred into small propeller aircraft. Through this multi-tiered handoff from jets to turboprops to delivery trucks, packages routinely reach front porches in remote towns by 9:00 AM.

[04:37](https://www.youtube.com/watch?v=y3qfeoqErtY&t=277s) Regional Routing and the Anchorage Crossroads

Funneling every package through Memphis would create crippling operational waste. Shipping a package from Phoenix to Seattle covers an overland distance of only 1,100 miles. Routing it through Memphis would require over 3,000 miles of flight and six hours in the air. While it would still make the overnight window, FedEx would burn unnecessary jet fuel over an extra 1,900 miles. To solve this, FedEx deploys secondary hubs like Oakland, California. Because Oakland operates direct links to both Phoenix and Seattle, the package travels along an efficient 1,300-mile routing.

Secondary hubs maintain direct services between high-density markets capable of filling aircraft independently, while Memphis acts as the backstop for destinations lacking sufficient pair-to-pair demand: - **High-demand pairings**: Western city pairs with sufficient volume route directly through regional hubs like Oakland. - **Low-demand spokes**: Cities like Albuquerque, New Mexico generate enough package traffic to fill an aircraft to Memphis, but not enough to fill dedicated regional planes to Oakland; west-coast parcels from such cities back-haul through Memphis.

Farther north, FedEx’s most ingenious facility operates out of Anchorage, Alaska. Despite having fewer than 300,000 residents, Anchorage hosts the fourth-busiest cargo airport on Earth. When accounting for the curvature of the Earth, a great-circle route drawn between FedEx’s Memphis SuperHub and its Asian hub in Osaka passes directly over Anchorage.

While conventional cargo carriers stop in Anchorage solely for crew changes and technical refueling—avoiding the heavy fuel burn of flying nonstop, which forces aircraft to carry more fuel and less paying cargo—FedEx and UPS turn the technical stop into an active sorting hub. Running nonstop flights from every Asian sorting center to every American hub would dilute traffic across too many half-empty aircraft. Instead, couriers fly dense inbound legs from various Asian cities into Anchorage. During the layover, packages clear customs, undergo automated sorting, and are reloaded onto outbound planes bound directly for the American hub nearest their final destination, maximizing payload capacity and slashing transit costs.

[07:12](https://www.youtube.com/watch?v=y3qfeoqErtY&t=432s) The Fleet Economics of Low Aircraft Utilization

Couriers run razor-thin margin operations anchored by massive commercial retail contracts: “Shipping is an incredibly price-sensitive business.” When institutional retailers ship millions of items per day, pennies dictate contracts. Yet the physics of express shipping forces couriers to use their most expensive capital assets—airplanes—in a manner that looks financially disastrous compared to commercial passenger airlines.

Because the entire express logistics model hinges on strict sorting windows between midnight and 4:00 AM, courier aircraft spend most daylight hours grounded on the tarmac. A FedEx flight departing Memphis at 4:00 AM arrives in Oklahoma City at 5:20 AM, then sits on the apron until 10:10 PM before returning to Memphis. Over the course of a day, the jet flies for only about two hours and sits idle for more than seventeen. Commercial passenger airliners, by comparison, regularly fly upwards of 12 hours every single day, achieving six times higher utilization.

Buying hundreds of brand-new, multi-hundred-million-dollar airframes to fly two hours a day would bankrupt a carrier. Consequently, freight networks buy heavily discounted, end-of-life passenger planes. While passenger carriers have retired nearly all Airbus A300s, FedEx, DHL, and UPS still operate hundreds of them because of their cheap acquisition costs. Even though older engines consume more jet fuel per flight hour, the low capital investment makes it profitable to let them sit idle for 17 hours a day. The rare exceptions—such as UPS purchasing new Boeing 747-8 freighters—are assigned exclusively to long-haul international routes where fuel efficiency over long distances recovers the high purchase price. This low-utilization, low-capital strategy is not unique to freight; ultra-low-cost passenger airlines like Allegiant Air employ the same approach by acquiring older planes to operate limited schedules profitably.

This dependence on enormous capital networks makes courier services nearly impossible for newcomers to enter—unless a player manufactures its own demand. Amazon, shipping over one million packages daily, reached a threshold where bypassing third-party couriers became viable. By launching its own Prime Air fleet of 32 aircraft and establishing a dedicated logistics web, Amazon can eliminate intermediaries and internalize shipping margins.

[10:28](https://www.youtube.com/watch?v=y3qfeoqErtY&t=628s) Squarespace Sponsorship and Channel Merchandise

Wrapping up the episode, the narrator highlights the reliability of sponsor Squarespace by pointing out their award-winning 24/7 customer support, explaining that while he encountered no technical problems while setting up his own site, he has relied on their assistance in the past and can personally vouch for their quality. He argues that maintaining a polished, credible web presence is essential for anyone operating an enterprise, media brand, or personal project, asserting: “If you run a business, a youtube channel, a podcast, or anything else, you want to have a professional web presence like I do with my site since that’s how people find you, and you can get started building your website with Squarespace for 10% off at squarespace.com/wendover.” Viewers are encouraged to support the channel by visiting the custom URL to check out the platform.

Before signing off, the narrator makes a brief channel announcement concerning new branded merchandise. For viewers whose immediate reaction to seeing the channel's updated logo was a desire to wear it, he announces that t-shirts featuring the new design are officially available for pre-order through DFTBA, directing viewers to find the purchasing link located in the video description.

- **Squarespace Offer:** 10% discount on website creation using `squarespace.com/wendover`. - **Merchandise Details:** New logo t-shirts open for pre-order on DFTBA via the video description link.

## Notable quotes > [07:12](https://www.youtube.com/watch?v=y3qfeoqErtY&t=432s) Shipping is an incredibly price-sensitive business.

## Mentioned FedEx, DHL, UPS, Amazon, Prime Air, Allegiant Air, Emirates, Etihad Airways, Qatar Airways, Memphis SuperHub, Worldport, Squarespace, DFTBA, Airbus A300, Boeing 747-8, Wendover Productions

## Video description Build your website with Squarespace for 10% off at http://squarespace.com/wendover

Pre-order our new tshirt with the new logo: https://store.dftba.com/products/wendover-productions-logo-shirt

Subscribe to Half as Interesting (The other channel from Wendover Productions): https://www.youtube.com/halfasinteresting

Check out my podcast with Brian from Real Engineering: http://apple.co/2ydYZOd (iTunes link) http://bit.ly/2gyeFle (YouTube link)

Support Wendover Productions on Patreon: https://www.patreon.com/wendoverproductions

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Animation by Josh Sherrington (https://www.youtube.com/heliosphere) Sound by Graham Haerther (http://www.Haerther.net) Thumbnail by Joe Cieplinski (http://joecieplinski.com/)

FedEx 767, Fedex a300, Allegiant Airlines Md-83, Prime Air video courtesy PDX aviation DHl a300 video courtesy LEJ.approach/dvldi UPS 747-8 video courtesy UPS FedEx footage courtesy FedEx

Music: “Cielo” by Huma-Huma, “Rhodesia” By Twin Musicom, “Ticker” By Silent Partner, “Not for Nothing” By Otis McDonald

Big thanks to Patreon supporters: M, Pete, Ken Lee, Victor Zimmer, Paul Jihoon Choi, Dylan Benson, Etienne Deschamps, Donald, Chris Allen, Abil Abdulla, Anson Leng, John & Becki Johnston, Connor J Smith, Arkadiy Kulev, Hagai Bloch Gabot, William Chappell, Eyal Matsliah, Joseph Bull, Marcelo Alves Vieira, Hank Green, Plinio Correa, Brady Bellini

[Source](https://www.youtube.com/watch?v=y3qfeoqErtY)

中文简报

联邦快递与UPS采购老旧货机，以抵消每日长达17小时的地面闲置成本由于午夜至黎明的包裹分拣窗口将每日飞行时间限制在两小时左右，昂贵的新机型在财务上不再可行，快递巨头因而选择采购价格低廉但较为耗油的老旧飞机。该视频详细剖析了联邦快递（FedEx）、UPS和DHL等主要快递物流企业如何在世界熟睡之际实现超远距离的隔夜包裹送达。视频探讨了如联邦快递孟菲斯超级枢纽（Memphis SuperHub）等大型枢纽，如何利用临近美国人口重心的地理优势完成午夜快速分拣波次，并由次级枢纽以及阿拉斯加安克雷奇等战略要道提供有力补充。最后，视频分析了货运承运人独特的机队经济学模型，阐明了货运网络为何通过采购低成本的老旧机型来应对日常利用率偏低的现状并维持盈利能力，同时提到了亚马逊凭借Prime Air进军该领域的发展动向。联邦快递运营着全球最大的货运航空公司，拥有650架飞机并服务于400个目的地，依托以夜间分拣枢纽为核心的全球网络，每日运送600万件包裹。 (0:00) 孟菲斯和路易斯维尔因毗邻美国人口重心，分别成为联邦快递和UPS的核心超级枢纽，孟菲斯也因此跃居全球第二大繁忙的货运机场。 (1:51) 阿拉斯加安克雷奇将跨太平洋航线上的强制技术经停加油转化为实时的清关和包裹分拣中转，成为全球第四大繁忙的货运机场。 (4:37) 特快货机运行在一种特殊的机队经济模型下，其每天的飞行时间往往只有两小时，闲置时间则超过17小时；相较于昂贵且省油的新飞机，廉价的临近寿命终期机身在财务上反而是最优选择。 (7:12)

Source quotes

[7:12] Shipping is an incredibly price-sensitive business.

Original transcript

[0:00] This video was made possible by Squarespace. [0:03] Build your website for 10% off at Squarespace.com/Wendover. [0:08] Overnight shipping is an absolute masterpiece of logistics that happens every single [0:14] night. [0:15] It may not be cheap, but you can get a package shipped from Miami, Florida on a Monday [0:19] night to Anchorage, Alaska, by 8:30 AM on Tuesday. [0:22] In fact, you can even ship a package, for example, from Edinburgh, Scotland on a Tuesday [0:28] and have the package arrive in Anchorage, Alaska by 9am on Wednesday. [0:32] The speed and efficiency of these worldwide delivery networks is [0:36] mind-blowing and it all happens while we sleep. [0:39] The three major consumer courier companies are FedEx, DHL, and UPS and each is as [0:45] impressive as the last. [0:46] FedEx has more planes than Emirates, Etihad, and Qatar Airways [0:50] combined; DHL delivers to every country in the world including North Korea; and UPS flies [0:55] to more than double as many destinations as the [0:58] largest passenger airline. [1:00] Each has a global network that allows for lightning fast shipping [1:03] at relatively low prices. [1:05] Behind all this speed are enormous air networks that connect the entire [1:09] world daily. [1:11] Each of these three operates hundreds of flights nightly, but FedEx is the best [1:15] example since their operations make them the largest [1:18] cargo airline in the world. [1:20] They have 650 planes flying to 400 destinations carrying 6 million [1:24] packages every single day and the vast majority of these flights operate to or from one of [1:30] their hub airports. [1:31] FedEx’s hub airports are spread out all across the world and serve as sorting points [1:36] where packages are transferred from one plane to [1:38] another. [1:39] They has hubs in Singapore, Guangzhou, Shanghai, Seoul, Osaka, Anchorage, Oakland, [1:44] Dallas, Indianapolis, Greensboro, Miami, Newark, Toronto, Paris, Cologne, Milan, and Dubai, [1:51] but the most important hub of all is the one in [1:53] Memphis, Tennessee because that’s their SuperHub. [1:57] Memphis is not a huge city—only about 650,000 people live there—but the reason FedEx [2:03] centers their worldwide operations in this city is because of it’s location. [2:07] Memphis is not actually in the geographic center of the US as might [2:11] make sense, but it is central. [2:13] You see, only about 200 miles away in Wright County, Missouri is the [2:17] mean population center of the US. [2:20] This is the average location of every resident in the [2:23] US meaning that the FedEx SuperHub in Memphis is [2:26] the best location to reach the most people in the shortest amount of time. [2:30] For similar reasons, UPS has their equivalent global hub, Worldport, [2:35] nearby in Louisville, Kentucky. [2:36] The scale of FedEx and UPS’ operations in these relatively [2:40] small cities is staggering. [2:43] This is the size of the commercial terminal at Memphis Airport while [2:46] this is the size of FedEx’s Superhub. [2:49] The difference at Louisville airport is even more [2:51] pronounced where this is the commercial terminal and this is UPS’ worldport. [2:56] You can’t even fly to the west coast non-stop on a commercial airline [3:00] from Louisville and yet UPS flies from this small city to five different continents. [3:06] FedEx’s operations in Memphis, meanwhile, make this [3:09] airport the second busiest cargo airport in the [3:12] world above those of enormous cities like Tokyo, Paris, Dubai, Shanghai, and falling [3:18] short only to Hong Kong. [3:20] How the FedEx superhub really works is that every night, about 150 planes fly in from [3:25] all around the world between the hours of 10pm [3:28] and 1am. [3:29] Immediately upon arrival, the planes are unloaded and their packages are put into the [3:33] hub’s automated sorting system. [3:35] Within only 15 minutes, each package arrives at a staging [3:38] area for its next flight where it’s loaded into [3:41] containers. [3:42] Planes therefore can start taking off again at 2am and continue to until 4am which [3:47] means that everywhere in the US can have a FedEx plane arriving by 6am, but there are [3:52] some destinations that don’t ship enough packages [3:54] to need a non-stop flight to Memphis. [3:57] To get to small towns fast, FedEx runs flights in small [4:00] propeller aircraft from the destinations of their [4:03] larger jets. [4:04] Presque Isle, Maine, for example, is far too small of a town at about 10,000 residents [4:09] to fill a full-size plane so, every morning, once the larger planes from Memphis arrive [4:14] in Manchester, New Hampshire and Portland, Maine, [4:17] packages bound for Presque Isle are sorted into smaller prop planes that continue north. [4:22] With this system, even small towns like Presque Isle [4:24] get their packages by 9am as every spoke in the system essentially functions as a mini-hub. [4:31] Packages are transferred from planes, to smaller planes, to trucks to reach their destination [4:36] as fast as possible. [4:37] Now, it’s important to note that not every FedEx package runs through Memphis. [4:43] That would be incredibly inefficient if a customer [4:45] wanted to, for example, ship a package from Phoenix, Arizona to Seattle, Washington. [4:50] While only 1,100 miles separate Seattle from Phoenix, [4:53] a routing through Memphis would total over 3,000 miles and six hours in flight. [4:58] The package would still make it overnight, but FedEx would [5:00] be wasting fuel carrying that package an extra 1,900 miles, so that’s why they have secondary [5:07] hubs. [5:08] In this case, FedEx’s Oakland hub has flights to both Phoenix and Seattle so the [5:12] package would take a relatively efficient 1,300 mile [5:15] routing. [5:16] Memphis essentially serves as the backup hub in case there’s not a more efficient [5:21] routing. [5:22] The secondary hubs, such as Oakland, in general have flights to destinations that are [5:25] already served by flights to Memphis, but the destinations from Oakland are high demand [5:30] destinations that will ship enough packages solely to the west coast to fill entire planes [5:35] to Oakland. [5:36] Some destinations, such as Albuquerque, New Mexico, ship enough packages to fill [5:40] entire planes to Memphis, but not enough to fill flights to Oakland with west coast bound [5:44] packages so a package shipped from here to the west coast would likely take a rather [5:49] inefficient routing backtracking to Memphis. [5:52] But FedEx’s most ingenious hub is here in Anchorage, Alaska. [5:57] Anchorage, with fewer than 300,000 residents, is home to the forth [6:01] busiest cargo airport in the world. [6:04] This is, once again, thanks to geography. [6:07] If you draw a straight line from FedEx’s Memphis hub to the one in [6:10] Osaka, taking into account earth’s curvature, it goes directly over Anchorage, Alaska. [6:16] This airport is just the perfect stop-over point [6:19] for flights from the US to Asia. [6:21] Now, dozens of cargo airlines operate in Anchorage but most of [6:24] them just use the airport as a refueling and crew swap [6:27] spot. [6:28] Modern airplanes can fly non-stop from the contiguous United States to Asia, but doing [6:33] so requires taking more fuel which requires taking [6:36] less cargo. [6:37] It’s just cheaper to stop in Anchorage, but FedEx and UPS use the stop for something [6:41] else—sorting. [6:43] If FedEx wanted to maintain current shipping times without the Anchorage [6:47] hub, they would likely have to run non-stop flights [6:49] from each of their Asian hubs to each of their American hubs, but they just don’t have [6:53] the demand to fill this many planes. [6:55] Instead, they run flights from their Asian hubs to Anchorage [6:58] then flights from Anchorage many of their American hubs. [7:01] While stopped in Anchorage, packages from Asia are processed through customs [7:05] and sorted to be put on the plane bound closest to their destination. [7:08] This helps cuts down on shipping time and cost. [7:12] Shipping is an incredibly price-sensitive business. [7:15] These courier companies rely on enormous contracts with retailers and, when [7:19] some of these retailers are shipping millions of [7:22] packages per day, every cent matters. [7:25] In a lot of ways, however, the express shipping model is [7:28] inherently expensive largely because of how couriers use their most expensive assets—planes. [7:35] So much is centered around those few sorting hours at the big hubs so FedEx’s planes [7:40] all have to wait around to arrive at the exact right moment. [7:44] Some FedEx hubs, such as Memphis, do sort packages during the day, but the overwhelming [7:49] majority of their business happens overnight. [7:52] FedEx’s flight from Memphis to Oklahoma City, for example, leaves at 4am and arrives [7:57] at 5:20am, but then the plane waits around until [8:00] 10:10pm to fly back to Memphis. [8:04] That’s over 17 hours sitting in Oklahoma City and, on that [8:08] route, the plane is only flying for about two hours per [8:11] day. [8:12] Meanwhile, commercial airlines regularly fly their planes for more than 12 hours per day [8:17] meaning they have six times higher aircraft utilization. [8:21] FedEx would never be profitable if they bought all new multi-hundred million dollar [8:26] aircraft to use for mere hours per day, so they don’t. [8:29] Overwhelmingly, FedEx and other cargo airlines use old aircraft at the end of their lives. [8:35] You’ll almost never see Airbus a300’s flying for [8:38] passenger airlines anymore, yet FedEx, UPS, and DHL [8:42] collectively own hundreds of them because they’re cheap. [8:45] They didn’t spend much purchasing these aircraft, so they don’t have to worry [8:49] about using them enough to offset their cost. [8:52] UPS does have some brand new 747-800 aircraft, which [8:56] are highly efficient, but they specifically schedule [8:58] these planes on their longest routes so that they can recuperate their high purchase price [9:03] through lower fuel costs. [9:05] With older aircraft, fuel costs might be higher since the planes are less efficient, [9:09] but overall it’s worth it since it allows FedEx to profitably leave their planes sitting [9:13] for all but a few hours each day. [9:16] Some passenger airlines, such as Allegiant Airlines in the US, uses the same [9:20] strategy purchasing cheaper planes to allow them to fly fewer hours per day profitably [9:25] and its now a tested and proven business strategy. [9:28] Express shipping is one of those businesses that requires enormous networks to make [9:32] work which is why you don’t see small shipping companies. [9:35] It’s almost impossible to get started in this business unless, of course, you can [9:40] make your own demand. [9:42] Amazon, which ships more than a million packages per day, is getting [9:46] into the delivery business. [9:47] They’ve established a fleet of 32 aircraft and are building out their [9:51] logistics network. [9:52] When shipping so many packages, Amazon is operating at a scale where they [9:57] can profit by taking the shipping companies out of the [10:00] equation. [10:01] FedEx, UPS, and DHL, meanwhile, are continuously focusing on further increasing the [10:06] efficiency of their networks since in this business more than any, time is money. [10:11] As you may have noticed, Wendover Productions has a new logo and with that I’ve [10:15] redesigned the website with Squarespace. [10:17] To be honest, I hadn’t used the website builder in a [10:19] while but this process reminded me of why I’m such a fan of Squarespace. [10:24] It was super simple to completely overhaul the site and, in my opinion, [10:27] it looks great. [10:28] I didn’t have any issues, but if you ever do they have award winning 24/7 customer [10:33] support that I have used in the past and can vouch for. [10:36] If you run a business, a youtube channel, a podcast, or anything else, you want to have [10:41] a professional web presence like I do with my site since that’s how people find you, [10:46] and you can get started building your website with Squarespace [10:48] for 10% off at squarespace.com/wendover. [10:53] Squarespace is a great supporter of the show so make sure to show them your appreciation [10:56] by at least checking them out at squarespace.com/Wendover. [11:01] And just one more thing, if you’re like me and the first reaction you had to seeing [11:04] this new logo is wanting a t-shirt of it, you’re in luck [11:08] because they’re now available for pre-order at DFTBA. [11:11] The link is in the description.