FedEx forms joint venture in mainland

United States-based courier giant Federal Express has set up its first joint venture in the mainland.

FedEx, which previously operated only through agents in China, formed the 50-50 joint venture with Tianjin-based Da Tian W. Air Service Corp, its agent for northern China, FedEx Asia-Pacific president David Cunningham said.

'We wouldn't make these kind of investments if we didn't see hard returns for our shareholders,' Mr Cunningham said. He declined to reveal the size of the investment.

FedEx, a unit of FDX Corp, has boosted its mainland services in the past month, adding one flight a week to Beijing and Shanghai, and launching five weekly flights to Shenzhen.

FedEx is the only US cargo airline operating flights in the mainland, but rival United Parcel Service recently applied to the US Department of Transportation for the right to operate flights into the country.

The joint venture, Federal Express-DTW Co, began operating from its Beijing headquarters on November 1. It planned to open branches in Shanghai, Guangzhou and Shenzhen by the end of next year, and in an additional 100 cities by 2005, Mr Cunningham said.

Working through a joint venture rather than an agent would allow FedEx to conduct sales, billing and customer services directly with clients, he said.

The venture's legal status would facilitate negotiations with government agencies.

Da Tian, a subsidiary of state-owned China Silk (Tianjin) Import and Export Corp, specialises in forwarding, charter operation and handling dangerous goods.

Separately, FedEx has opened its first Asia-Pacific data centre in Singapore, its hub for information technology services and operations across Asia.

The advanced client-server system would provide the processing power needed to serve the company's regional network, Mr Cunningham said.

'This data centre allows us to think globally and act locally, focusing on regional needs and capitalising on corporate resources,' he said following the launch of the data centre by Singapore's Economic Development Board chairman Philip Yeo.

Mr Cunningham said the network speeded up delivery of FedEx's core applications to international regions, and allowed the company to scale applications to meet customer demands and needs.

'We are dedicated to developing this market and providing outstanding value to our customers by delivering world-class express transportation based on advanced technology and unsurpassed customer service,' he said.

The FedEx data centre was a testimony to the IT capabilities that Singapore had put in place, Mr Yeo said, and the company would continue to benefit from this.