Mon, 14 Aug 2000

FedEx sees bright outlook in rebounding Asian market

SUBIC BAY, The Philippines (JP): Leading air express transportation company Federal Express (FedEx) sees a favorable Asian market ahead as the region recovers from its economic crisis.

Managing director for its Southeast Asia operation of the U.S.-based company Steve E. Cox said the realization of free trade and growing online trade transaction volume in the region would also bode well for the company.

"Looking ahead, we're very excited about what Asia is going to give to us and what we can do for Asia. We do believe and we do see that things are on the rebound again, and we see more opportunities," Cox told a small group of reporters during a recent tour of the company's Subic Bay hub facility in the Philippines.

He declined to provide a projection. But he said FedEx business in Asia grew by 28 percent last year.

"Even during the crisis, there were still companies that needed time-definite and reliable transportation," he said.

FedEx, with its familiar purple-and-orange logo, entered Asia in 1983. FedEx currently serves more than 30 countries and territories in the Asia Pacific market with over 5,000 employees. Operating its own wide-bodied MD-11, DC-10 and A310 aircraft, FedEx offers over 260 flights per week to major cities in Asia.

"In Asia we're the leader in transportation and logistics. Nobody has an extensive network like FedEx has," Cox said.

FedEx made a very significant investment in Asia in 1995 when it opened a huge hub facility in the Subic Bay area, the former U.S. navy base in the Philippines. The Subic Bay hub now connects 18 major markets in Asia from 14 five years ago. Nine aircraft are now flying in and out of the hub every night.

Cox declined to disclose the total investment the company made in the facility.

He said the facility allowed FedEx to transport packages overnight to any major center in Asia efficiently.

"Subic Bay helped us to revolutionize the transportation and logistics business in Asia.

"If you look at Asia and compare it with Europe, what Asia doesn't have is a continuous land mass as most of the countries here are separated by water," he said.

On average, nine FedEx aircraft fly into the Subic hub facility every night from other FedEx centers in Asia. The aircraft start to come in at about 11 p.m. at night, and once the plane stops, the staff immediately unload the packages, sort them out and put them on board the airplane flying to the packages' destination. By 2 a.m., airplanes start to fly out and by 4:30 a.m. all planes must have departed.

FedEx customers can also track their shipment through the computer, thanks to its super tracker technology.

Cox said it was FedEx who introduced the tracking system to the industry.

Like other FedEx major hubs, the Subic Bay hub also has a logistics center, which provides warehousing and logistics management services to manufacturing companies.

Cox said the FedEx logistics center helps manufacturers to significantly cut back on the cost of inventory.

"You can focus on manufacturing your products and improving the quality of your products. Let FedEx take care of the movement of your goods. Let us take care of the warehousing of your goods," he said.

The logistics center with its high-powered computer network helps clients process customers' orders and coordinate deliveries of goods from around the world.

"So companies can cut the cycle time and save on the high inventory cost," Cox said.

In Indonesia, FedEx established its presence in 1985 through its licensee, PT Repex Perdana International. FedEx has grown into a leading air express transportation company in Indonesia for time-definite cargo shipments.

Starting in 1998, FedEx began using its own Airbus A310 to serve Jakarta five times a week.

Connected to its Subic Bay hub, the flights bring customers in Jakarta such services as the AsiaOne network, which provides Jakarta with overnight delivery from major Asian centers, and the Super X service which provides delivery to North America within 24 to 48 hours.

Asked about future expansion plans in Indonesia, Cox said it would depend on how business volume developed here. (rei)