FedEx Sees Asia Boost from New China Hub-Exec
Tue Nov 15, 2005
PUSAN, South Korea (Reuters) - FedEx Corp. (FDX.N: Quote, Profile, Research), the world's top air express shipper, expects a boost from its new China hub to be opened in late 2008, as the industry is set to benefit from a continuing inter-Asia cargo growth, a senior executive said on Tuesday.
The new Asia-Pacific hub, located at Guangzhou's new Baiyun airport in southern China, will be FedEx's largest outside the United States and double the capacity of its current regional base in the Philippines.
"It's perfectly positioned geographically to serve the entire scope of Asia," Michael Ducker, executive vice president for the international business at FedEx Express, told journalists on the sideline of the Asia Pacific Economic Cooperation (APEC) meetings.
"We can hook our global networks together directly."
FedEx joins rivals United Parcel Service Inc. (UPS.N: Quote, Profile, Research) and Deutsche Post's (DPWGn.DE: Quote, Profile, Research) DHL Express in a rush to expand in the air cargo market in China, the world's manufacturing workshop and now the third-biggest trading power.
Ducker said the planned introduction of new giant Airbus (EAD.PA: Quote, Profile, Research) A380 freighters, which will start being delivered in 2008, will provide a further business momentum when it begins to serve routes between its major hubs including China.
"The new airplanes give you much greater capacity and lower unit cost."
Ducker revealed optimism for the industry's outlook, citing Boeing's forecast of an annual 8.5 percent growth in inter-Asia cargo for 2005 and a 6.7 percent rise in Asia-Europe cargo.
CHINESE POWERHOUSE
He said ongoing globalization, China's emergence as a trading powerhouse and Internet-driven shipping demand would drive further growth going forward.
"The industry is in a very good place based on some of these global trends occuring today."
The company had also taken into account concerns about avian flu, he said.
"We are just hopeful that doesn't happen. But we have contingency plans," he said, without elaborating.
Ducker, one of the U.S. representatives on the APEC Business Advisory Council, also expected the Asia-Pacific leaders' meeting would help the stalled talks on global trade.
The World Trade Organization's 148 member countries are hoping to agree on an outline of the Doha round of free trade deal at a Dec. 13-18 Hong Kong meeting and conclude it by the end of next year.
"To be in the same room, discussing these issues face to face and talking about compromises we can make is very constructive," Ducker said.
The round, which could lift tens of millions of people out of poverty and bring new zest to global economic growth, has been dogged by wrangling over subsidies and long-protected markets.
"We certainly see it as a global enabler of trade," Ducker said, hoping a successful deal will cut bureaucracy and customs inefficiency and save costs in global trade.
"I hope we can get something done -- there's a great value in it."
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