China’s New Coronavirus Policies Disrupt U.S. Air Cargo Operations

Date: Friday, April 3, 2020
Source: The Wall Street Journal

FedEx, UPS made appeals to top Trump administration officials in a bid to help protect supply chains

China’s new coronavirus policies roiled the operations of FedEx Corp. FDX +7.70% andUnited Parcel Service Inc., UPS +4.26% rattling flight crews, disrupting cargo shipments and prompting appeals from the carriers to the White House and other U.S. officials to stave off supply-chain disturbances amid the pandemic, according to people familiar with the matter.

The disruptions were caused by more stringent Chinese coronavirus testing procedures—including nasal swabs—and quarantine threats that flight crews objected to, the people said. Adding to tensions, the people said, a UPS pilot was suspected of contracting the virus, which UPS confirmed.

“Earlier in the week we had a pilot test inconclusive when submitting to routine testing in China,” UPS said in a statement. “As a precaution, the employee was transported to the U.S. on the next available UPS flight in a crew rest cabin on the aircraft. The employee is in the U.S. and will receive further medical evaluation.”

Some Chinese officials told cargo airlines that crews would need to undergo lengthy quarantine procedures upon entering the country even though other governments allow such employees to enter the border, isolate in a hotel, and get on their next flight out, according to a person familiar with an interagency briefing held by U.S. officials Wednesday.

Chinese officials also demanded crews already staying at hotels in the country move to government quarantine facilities, this person said. In at least one case, when an employer offered to medevac an individual out of the country, the Chinese government resisted, the person said.

A FedEx spokeswoman said recent changes in crew-testing procedures forced it to suspend some flights out of Guangzhou, the capital of China’s southern province of Guangdong, for 24 hours. She said the company worked with both U.S. and Chinese officials to resolve the matter and has since resumed normal air operations.

A person familiar with China’s policies said it was authorities in Guangdong only who had sought to impose quarantines on flight crews, while officials in other places like Shanghai have prioritized letting cargo flights operate to help the economy.

In one instance, a UPS pilot in the last several days objected vigorously to a new nose-and-throat testing policy that took effect March 27, and Chinese officials threatened to revoke his visa, a U.S. official said. UPS faced the possibility that its pilots would refuse to fly delivery routes to China as a result.

The Independent Pilots Association, which represents UPS pilots, raised concerns about the invasive tests with company management. “Our pilots have been subjected to aggressive testing in China,” a union spokesman said.

UPS bombarded top officials in the administration, including White House chief of staff Mark Meadows and Trump senior adviser Jared Kushner, requesting assistance with the new, more stringent testing regime.

The White House declined to comment.

In its statement, UPS said its service “remains unaffected and we are focused on business continuity for our customers, ensuring the safety and well-being of our employees while working to maintain the economic vitality of countries affected by the Coronavirus.”

UPS also has committed to returning its crew members to the U.S. if another country raises concerns about coronavirus exposure. “We do not intend for our pilots to be concerned about whether they will have safe passage home and appropriate care upon their return,” a spokesman said.

FedEx’s top executives sought help Tuesday from Transportation Department officials at the direction of Chief Executive Fred Smith, according to another person familiar with the dispute, who called the issue a “code red situation” for the company.

A FedEx spokesman acknowledged the company appealed to U.S. and Chinese officials for help. In a statement, it said it made changes in response to the new testing procedures.

“FedEx has adjusted its network operations to accommodate these new requirements,” the statement said. “The adjustments we made were temporary and FedEx continues to maintain normal air operations into and out of China including at our Asia Pacific Hub in Guangzhou.”

The Chinese Embassy in Washington, D.C., didn’t respond to a request for comment.

FedEx said none of its personnel currently is quarantined in China. To date, no UPS pilot has been quarantined in China, the union spokesman said.

Relations between the U.S. and China, already frayed by a two-year-long trade war,have been deteriorating in recent weeks. President Trump, Secretary of State Mike Pompeo and other officials have taken to referring to the coronavirus as the “Chinese virus” or “Wuhan virus” to highlight China’s role in the pandemic. A Chinese Foreign Ministry spokesman used Twitter, which is blocked in China, to promote rumors that U.S. military members brought the virus to Wuhan late last year.

FedEx has had several run-ins with Chinese authorities recently. Officials in last September detained a FedEx pilot in Guangzhou. In June 2019, FedEx apologized after it misrouted some of the packages of Chinese telecommunications giant Huawei Technologies Co. The parcels were misrouted after FedEx changed its internal systems to comply with the U.S. Commerce Department’s restrictions on doing business with the Chinese firm. Chinese police have also opened multiple investigations into the U.S. delivery company

 

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