Fedex growing with Asia

A new chapter is about to open for Fedex in Asia, one that underscores the express company's success in Asia that had its humble beginnings with a small hub in Japan and a network inherited from its purchase of the Flying Tiger Line. Donald Urquhart reports.

The opening of the US express company’s US$150 million "superhub" at southern China’s Guangzhou Baiyun International Airport later this year will replace its current Asian hub located in Subic Bay, Philippines which was no longer large enough to handle thesurging Asian volumes.

Fedex has a 30-year lease on the Guangzhou facility with an option for an additional 20 years and with 155 acres in total, Fedex has the ability to nearly double its capacity ifneeded.

Surging Asian volumes

The new hub was necessary for a number of reasons, according to FedEx Asia Pacific president David L. Cunningham, Jr. This was driven primarily by express demand growth in China, forecast to grow at 10.8 per cent over the next 20 years, along with intra-Asian trade growth – currently growing at 8.6 per cent per year – faster thanany other area in the world.

The intra-Asian air cargo market is currently the 2nd largest market in the world today. In a nutshell, Fedex has simply outgrown its ability to park planes at Subic, Cunningham said, speaking to business leaders in Singapore recently. "If you look at trade patterns in Asia, 10 years ago the top three trade partners of every Association of Southeast Asian Nations (Asean) countrywere the US, Europe and Japan.