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From crabs to COVID-19 tests: Southwest is gearing up for a busy (cargo) holiday season

Nov. 22, 2020
7 min read
From crabs to COVID-19 tests: Southwest is gearing up for a busy (cargo) holiday season
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The holiday season may be nearing, but there is no tinsel hanging in Southwest Airlines' cargo warehouse at Baltimore/Washington airport. At least not yet.

Boxes and boxes of crabs, arrivals from a recent flight from the Gulf of Mexico, are sorted before they're sent on their way to Maryland's famed crab houses — whose menus feature more out-of-state crabs than one might expect. Fresh cut flowers fill a refrigerator while boxes from e-commerce shippers line walls. And in a sign of the coronavirus pandemic times, white boxes with COVID-19 tests await shipment.

“Every kind of freight we ship comes through Baltimore," Sean Moody, cargo customer service manager at Southwest Cargo, told TPG during a tour of the airline Baltimore/Washington (BWI) freight operations earlier in November.

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Ground handlers unload crabs from the Gulf of Mexico bound for Maryland's famed crab houses at Baltimore/Washington airport. (Image by Edward Russell/TPG)

Baltimore/Washington is one of Southwest's busiest bases, both for flights and cargo. The airport is second only to Denver (DEN) in handling transfer freight.

This time of year already accounts for a large portion of Southwest's cargo goods. Now, the airline is preparing for an even bigger uptick in shipments through the end of the year, said Southwest managing director of cargo and charters Wally Devereaux in an interview with TPG.

“You have what is being referred to as ‘peak on peak,’" he said. "It’s really being prepared to move high-volumes of e-commerce related goods.”

Related: Southwest on full-court press to win back biz flyers, one airport tour at a time

A Southwest Boeing 737 at Baltimore/Washington airport after arriving from Houston. (Image by Edward Russell/TPG)

Underscoring the type of year it's been, Cowen analyst Helane Becker understatedly described 2020 as "an interesting holiday shipping season” in a recent report. The air freight market faces both higher-than-usual demand as more goods are being shipped, yet less ability to carry those shipments as passenger flights are down significantly in response to the pandemic.

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It is a lesser-known fact that two-thirds of global air freight flies in the belly of passenger jets, be it a Southwest 737 or American Airlines Boeing 777. And on some international routes — such as those between the U.S. and China — so much cargo flies on passenger flights that airlines are resuming service there on the back of cargo demand. Paying passengers are just an added bonus in the current environment.

The lack of supply in the midst of rising demand has increased shipping rates, benefitting passenger and cargo airlines alike, wrote Becker.

Related: Airlines expect a post-coronavirus boom in leisure travel, they just don’t know when

Still, that increase does not outweigh the losses at Southwest. Cargo revenues were down 2% during the three months ending in September. That's a far shallower decline than the 72% drop in passenger revenues, but it's a drop that comes as many other large airlines recorded double-digit jumps in freight revenue.

Devereaux attributed this drop to the loss of certain types of freight, like conference materials and equipment for sporting events. The need for these goods all but disappeared when COVID-19 shut down large swathes of the economy.

“We’re still not back to maybe normal," he said. "But those commodities that were really impacted early on have started to return, at least to some degree, and e-commerce goods have still remained very high throughout.”

Related: Southwest Airlines adds new Hawaii route, connects Sarasota and Savannah to its ‘hubs’

Southwest has seen an increase in e-commerce shipments from freight forwarders like Hassett Logistics during the coronavirus pandemic. (Image by Edward Russell/TPG)

In terms of e-commerce, Southwest deals almost exclusively with middlemen, or freight forwarders. Among those is Hassett Logistics, many of whose shipments pass through Baltimore.

Hassett boxes were just part of the cargo coming off a Southwest flight that had just arrived from Houston Hobby (HOU) when TPG toured the Baltimore facilities earlier in November. Fresh caught crabs and cut flowers were among the allotment being sorted. Some were destined for connections to onward flights, others bound for warehouses where they would be picked up by local distributors. Or, in the case of crabs, they were headed directly to the restaurants themselves.

Southwest workers sort boxes of live crabs in a warehouse at Baltimore/Washington airport. (Image by Edward Russell/TPG)

“My favorite tall tale is you can eat a Maryland crab," Moody joked as boxes of crabs from the Gulf head out to Maryland restaurants. Southwest handles far more shipments of crabs to Baltimore than it sends out, he added.

Crab and other seafood shipments were initially hit hard when restaurants closed their doors early in the pandemic. This has ticked back up in recent months, but remains below 2019 levels, Devereaux said.

A sign of the times, Southwest carries COVID-19 test samples in these white boxes in the bellies of its Boeing jets. (Image by Edward Russell/TPG)

However, the crisis has also created opportunities. One is carrying boxes of COVID-19 testing samples to various labs around the country. This is a critical mission as the U.S. continues to fight the pandemic that is surging once again.

In terms of carrying the eventual coronavirus vaccine, Southwest is in conversations with customers now so it can be prepared when shipments begin.

However, if the vaccine shipments require significant cold storage facilities, Southwest may need to make investments. Its Baltimore warehouse only has one refrigerator that is not equipped, for example, to facilitate the minus 94 degrees Fahrenheit storage temperatures that the in-development Pfizer vaccine requires.

Related: Southwest Airlines warns staff of first layoffs in carrier’s history

Not even the holidays will get cargo back where it was before COVID-19, at least not at Southwest. Freight, like the airline industry in general, needs the economy to get back to normal operating procedure before things will really look rosy again, said Devereaux.

"Not until you're really back to a complete state of everything being open, up and running and operational do I think you have a complete recovery across all commodities in the cargo sector," he said. "But things do continue to improve in certain commodity areas."

Maybe a recovery will mean some tinsel for Southwest's cargo warehouse, after all.

Related: Southwest helps BWI dominate DC area as coronavirus shakes up US airports

A Southwest ground handler loads boxes in the belly of one of the airline's 737s. (Image by Edward Russell/TPG)


Featured image by Edward Russell/TPG.

Featured image by Southwest has seen an increase in e-commerce shipments from freight forwarders like Hassett Logistics during the coronavirus pandemic. (Image by Edward Russell/TPG)

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Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
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    Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership.

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Why We Chose It

Sometimes it's worth a large investment to reap the benefits of a great credit card. That's exactly the case with the Amex Platinum card. In exchange for the annual fee, you'll unlock access to the Amex Membership Rewards program that let you access airline and hotel transfer partners, along with new lifestyle and travel credits. This card is also incredibly rewarding for travel purchases, helping you rack up a ton of Membership Rewards points for your next award trip.

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  • The current welcome offer on this card is quite lucrative. TPG values it at $1,600.
  • This card comes with a long list of benefits, including access to Centurion Lounges, complimentary elite status with Hilton and Marriott, at least $500 in assorted annual statement credits and so much more. (Enrollment required for select benefits.)
  • The Amex Platinum comes with access to a premium concierge service that can help you with everything from booking hard-to-get reservations to finding destination guides to help you plan out your next getaway.

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  • The high annual fee is only worth it if you’re taking full advantage of the card’s benefits. Seldom travelers may not get enough value to warrant the cost.
  • Outside of the current welcome bonus, you’re only earning higher rewards on specific airfare and hotel purchases, so it’s not a great card for other spending categories.
  • The annual airline fee statement credit can be complicated to take advantage of compared to the broader travel credits offered by competing premium cards.
  • Earn 80,000 Membership Rewards® points after you spend $6,000 on purchases on your new Card in your first 6 months of Card Membership. Apply and select your preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year and earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
  • Get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when you pay with your Platinum Card®.
  • $240 Digital Entertainment Credit: Get up to $20 back each month on eligible purchases made with your Platinum Card® on one or more of the following: Audible, Disney+, The Disney Bundle, ESPN+, Hulu, Peacock, SiriusXM, and The New York Times. Enrollment required.
  • $155 Walmart+ Credit: Cover the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax. Plus Ups are excluded.
  • American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. There are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
  • $200 Uber Cash: Enjoy Uber VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status is available to Basic Card Member only.
  • Get up to $300 back per calendar year on the Equinox+ digital fitness app, or eligible Equinox club memberships when you pay with your Platinum Card. Enrollment required. Learn more.
  • Breeze through security with CLEAR® lanes available at 100+ airports, stadiums, and entertainment venues and get up to $189 back per calendar year on your membership when you use your Card. Learn more.
  • $695 annual fee.
  • Terms Apply.
  • See Rates & Fees