FedEx starts direct cargo flight from Guangzhou to India

PUBLISHED : Thursday, 06 January, 2011, 12:00am
UPDATED : Thursday, 06 January, 2011, 12:00am

Growing trade between India and Asia, particularly China, prompted FedEx Express to launch direct cargo flights between its Asia-Pacific hub at Guangzhou's Baiyun International Airport and Mumbai and Delhi.

David Cunningham, president of FedEx Express Asia-Pacific, said the five-times-a-week service would directly link two of the world's fastest-growing economies and regions.

He said a third of India's imports and exports were directly attributable to Asia while the volume of overall trade between India and Hong Kong increased by 50 per cent last year.

Cunningham said China's economy grew by 10 per cent last year, while India's grew by about 8.8 per cent. 'I expect it to continue,' he added.

Asked about the outlook for the company's business this year, given global economic uncertainties, he pointed out that the previous 18 months had seen 'some pretty big wobbles'.

He added that there were 'certainly challenges out there in front of us. With every one of these challenges there is an opportunity.'

FedEx has forecast that its margins would 'improve in the second half of fiscal 2011 and in fiscal 2012' based upon 'solid global demand for our differentiated services and as certain cost headwinds subside next fiscal year'. This came after parent FedEx Corp reported a 12 per cent rise in revenues to US$9.63 billion in the quarter to November 30.

This included a US$5.99 billion contribution from the FedEx Express division which saw revenue rise 13 per cent compared with a year earlier on the back of an 11 per cent surge in daily international priority package shipments led by exports from Asia.

FedEx Express inaugurated the direct flight from Guangzhou on Tuesday night using an Airbus A310 freighter, which has the capacity to carry about 40 tonnes of cargo.

Cunningham said although 'it was very early days', cargo volumes east and westbound were 'reasonably balanced'.

Cargoes typically comprise textiles, electronics and other high- value goods.

While he declined to give a breakdown of how much cargo on the Indian flights was transshipped at its Guangzhou hub to and from other Asian countries, Cunningham pointed out the flights would give quicker access for Indian exporters to other markets particularly to the United States.

He added that the new service would cut two days from the transit time for priority freight and high-value shipments from Asia to India and allow a next-business-day document delivery service from Asia to selected locations in Mumbai.

There would also be a one-day cut from the delivery of expedited freight shipments from India to Asia.

The Guangzhou-India flights come weeks after FedEx Express strengthened existing Greater China services. These included the deployment of a larger, more fuel-efficient Boeing 777 freighter on flights from Hong Kong to its European hub in Paris that will add almost 22.7 tonnes of extra capacity per week.

This 'positions FedEx well for an anticipated increase in trade as the European economy gradually recovers', he said.

Boeing 777 freighters were used to launch a four-times-weekly direct service between Shenzhen and the FedEx US hub in Memphis in early November.

Bigger and better

The new service can carry about 40 tonnes of cargo each time

FedEx will undertake this number of flights weekly for its Guangzhou-India service: 5