FedEx has signed an MoU with China Southern Air Logistics to expand its Asia-Pacific hub in Guangzhou while reducing capacity on routes between the US and China. For shippers, the agreement signals that China air cargo capacity is being redirected toward Europe and intra-Asia instead of expanding on trans-Pacific routes.
What the agreement covers: The MoU covers flight and hub connectivity, network planning, fleet, ground operations and digitalization. It is a framework agreement, with no disclosed commitments on capacity, codeshare, or shipment volume. Deals like this can take a year or more to translate into booked freight.
China Southern Air Logistics operates 19 Boeing 777 freighters and ranks among the world’s top 10 cargo carriers by traffic, according to IATA. Its fleet and crew are already based at FedEx's Guangzhou hub, which is a key reason of the partnership.
“Partnering with an airline that has fleet, schedule reliability, and pilots already located there makes a lot of sense,” said Derek Lossing of Cirrus Global Advisors.
Why now: FedEx is reducing its exposure to the US-China trade. CEO Raj Subramaniam said the company cut trans-Pacific outbound capacity from Asia by 25% year over year. FedEx has also flagged tariffs as a roughly $1 billion headwind for fiscal 2026 as US-bound volume from China declines. Volumes have falled about 33% for a fifth consecutive month.
Expanding the Guangzhou hub allows FedEx to keep using a major origin point while redirecting capacity toward Europe and intra-Asia. The company is also building a 41,000 square meter sorting center at the hub, scheduled to open in 2027, which it says will triple the site's throughput to 25,000 packages an hour.
A pattern: DHL Global Forwarding is adding weekly Boeing 777 freighter rotations between Asia and Europe, linking Shanghai with Leipzig and Hong Kong with Liège. Major carriers are cutting US-China capacity while building more redundancy across intra-Asia and Asia-Europe lanes.
Whether FedEx's cooperation areas lead to booked capacity remains to be seen. For now, the 2027 sorting center is the company’s only confirmed investment in Guangzhou.
