FedEx's home hub in Memphis, Tennessee, is poised to build on shipment growth last year that topped Hong Kong's for the first time since the US facility lost the title of world's busiest cargo airport in 2010.
Volume rose 2.5 per cent in Memphis, outpacing Hong Kong's 2.3 per cent, Bloomberg data show. That helped shrink Hong Kong's lead in tonnage to 0.2 per cent from 5.3 per cent in 2010. Memphis, the biggest US airport by cargo volume, stands to benefit further with air shipments industrywide forecast to rise after two years of decline.
The growth signals that slowing expansion in Asia and a slump in Europe have not derailed a recovery in the US, where FedEx is an economic barometer because of deliveries from medical supplies to electronics. FedEx draws 70 per cent of sales from the US.
Kevin Sterling, an analyst at BB&T, said: "Memphis has kind of held steady versus Hong Kong, which has been on more of a roller-coaster ride." In the US, "while it's weak, it's technically still a recovery", he said.
The International Air Transport Association forecast that air cargo demand worldwide would increase 1.4 per cent this year, resuming growth after declines of 1.5 per cent last year and 0.6 per cent in 2011.
"Improved business confidence should help cargo markets to recover the lost ground from 2012," the IATA said. The US will be the top cargo market in 2016, with 7.7 million tonnes of international freight that year, against 3.49 million for mainland China and 3.23 million for Hong Kong, it predicted.
Hong Kong faced more challenges, grappling with a triple whammy of slower mainland Chinese expansion, declining shipments to Europe and fiercer competition from other area airports, Wells Fargo senior economist Mark Vitner said. Lower European volumes would probably remain a challenge in the next four years, the IATA predicted. Shipments between the Asia-Pacific region and Europe would drop to 17 per cent of global freight traffic by 2016 from about 18 per cent in 2011, the group said.
At the same time, Hong Kong's regional competitors are vying for larger market share. Terminals in China, such as Shenzhen Baoan International Airport and Guangzhou Baiyun International Airport, where FedEx opened a hub in 2009, were getting more traffic because of infrastructure improvements, said Chris McNally, a political economist at the East-West Centre.
"Before, a lot of companies who relied on on-time deliveries used Hong Kong because it just had perfect logistics," McNally said. "You have a lot of new airports that are getting into the game. Hong Kong is just plain losing competitiveness."Topics: FedEx