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FedEx has long been a bellwether for the global economy. So when the founder of the company that employs 300,000 workers and operates a fleet of jet freighters speaks, people listen.
Fred Smith told the annual gathering of the International Air Transport Association (IATA) that while global trade is growing it is doing so at a slower rate than before the recession and considerably slower than what he called the “Golden Days,” the decade before the Great Recession.
The culprit is protectionism, according to Smith. In his view, a rising tide of mainly non-tariff barriers perpetrated by national governments, who want to protect local industries and limit foreign investment, are the main drivers behind the slowdown in world trade.
He's not the only one to finger protectionist behavior as an impediment to growth. The WTO released a report stating that governments introduced 100 different measures in 2013 that blatantly discriminated against foreign goods and services. Such actions, he report noted, are a major reason why international trade growth slowed to 2.5 percent, well off the annual average growth rate of 5.5 percent during the past decade. The good news is that the WTO expects growth to pick up to between 4 and 4.5 percent over the next two years. But it could be more robust if it weren't for the manufactured obstacles—and may be in fir further drops if protectionist measures increase.
Meanwhile, Smith said that airfreight is flat or falling and that older jet freighters are getting parked in a desert while carriers invest in smaller more fuel efficient airplanes. In addition to protectionism, he cited composition in what the freighters carry as another drag on airfreight growth. Microprocessors used to comprise about half of international express deliveries, but shipments took a hit when the processors got smaller and demand for PCs and other electronics stalled. It's unclear what will replace them. To add to the woes of airfreight companies, ocean freighters have made a comeback with bigger, faster, more fuel-efficient ships.
Smith has to look no further than his China operations to illustrate his main point. Though not mentioned in his speech, news reports indicate that Chinese officials have delayed renewal permits for FedEx and its competitor UPS to operate in a limited number of Chinese cities. These companies have not been permitted to deliver packages in Beijing, the capital. The authorities say they are reviewing the applications.
Alibaba and the 40 Markets
Meanwhile, Chinese delivery services have no such restrictions and have grown larger and richer serving China's booming e-commerce market. Yes, worldwide e-commerce growth is one bright spot for airfreight companies and the global economy as a whole; but the pernicious hand of protectionism may tilt the playing field here too by rewarding homegrown companies. Chinese-owned e-commerce platform could actually spur growth of imported goods by arranging for them to be shipped and stored in their warehouses in bulk, making it easier and cheaper for foreign producers to sell more of their wares in the world’s fastest growing e-commerce market. Even if busy body bureaucrats try to get in the way, the sheer size and clout of companies like Alibaba and its hundreds of millions of customers will be hard to thwart completely.
No wonder multinational companies are pushing more free trade agreements, and 23 new ones went into affect in 2013. These agreements set limits on the role of governments in restricting trade and will harmonize standards, regulations and processes that can keep goods out and tie their producers up in knots.
The two big regional trade agreements being negotiated now will go a long toward towards increasing trade between the U.S. and Asia for many years to come. But there will be losers and they won’t go down without a fight. No wonder the proposed agreements are in trouble. No wonder Fred Smith of FedEx is worried, reduced at least for now to making speeches in defense of a system that he helped create. A system that has brought broad benefits to many of us, including those who’d like to rejigger it for their exclusive benefits.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| LBBR16-2LS bearing | 16 | 24 | 30 |
| LBBR14-2LS bearing | 14 | 21 | 28 |