FedEx has signed a Strategic Memorandum of Understanding with China Southern Air Logistics to expand cooperation across cargo space, routes, fleet, operations, and digitalisation, reports Washington, DC's Supply Chain Dive.

The partnership aims to strengthen Guangzhou's role as an international hub for US shipments to Southeast Asia. FedEx China President Poh-Yian Koh stated that the collaboration would build a smarter, more resilient logistics ecosystem while serving the cross-border needs of China-based shippers.

China Southern Air Logistics chairman Li Xiao mentioned that the agreement covers five areas of cooperation. Derek Lossing, founder of Cirrus Global Advisors, noted that FedEx already operates a hub at Guangzhou Baiyun International Airport, making the partnership logical given the carrier's fleet and pilot base there.

Mr. Lossing indicated that the strategy mirrors moves by other integrators such as DHL Express, which has long purchased block space capacity from carriers. He added that shipments from the US to Southeast Asia could connect through the joint hub in Guangzhou.

The deal comes as FedEx continues to adjust its network to market dynamics. In 2023, the company introduced its 'Tricolor' redesign to align capacity with demand, relying more on third-party providers for less urgent shipments while focusing its own fleet on priority volumes.

Last year, FedEx reduced air cargo capacity between Asia and the Americas, including third-party capacity, President and Chief Executive Raj Subramaniam stated at the time.