According to this article, it's far worse than that: eight inch floppy disks! Capacity might be as much as 1.2MB per disk, but probably less. https://simpleflying.com/americas-atc-floppy-disks-12-billio...
If anyone wants to see the guts of an 8-inch drive and how complex it is check out this video from Adrian's Digital Basement.
Aha so that answers my question about why they haven't at least switched to USB thumb drives for their sneakernet. These aren't PCs. Probably minicomputers such as a TI-990 or similar. They don't have USB ports.