United States-based Federal Express (FedEx) yesterday said it was not in the running for the proposed express cargo terminal at Chek Lap Kok airport, leaving DHL Worldwide Express as the only operator to tender a bid for the project. United Parcel Service (UPS) and TNT Express Worldwide, the other two preferred bidders, chose not to submit a tender by the March 15 deadline. FedEx's Asia-Pacific president David Cunningham said: 'We evaluated the tender document very diligently but the bottom line was, without further air liberalisation, it did not make economic sense to pursue the project. 'The model the Airport Authority proposed was not conducive to benefiting Hong Kong's express industry, or FedEx.' An Airport Authority spokesman said it would not reveal how many bids had been received for the express terminal. But senior executives from TNT and UPS said after the tender deadline they had not submitted bids. Ken McCall, TNT chief executive for Asia, Middle East and Africa, said: 'We asked ourselves what value this added for our customers and the answer was none, so we decided not to bid.' There is no way of knowing what having just one bidder will mean for the profitability of the new centre, one industry expert said, adding that, presumably, DHL's bid would have been formulated before it learned it had no competitors. It is thought the failure of the air-service agreement (ASA) talks between the United States and Hong Kong forced the US integrators to pull out. Peter Negline, aviation analyst for investment bank JPMorgan, said: 'The ASA talks were always going to be crucial to FedEx's and UPS' bids. The express centre really only had a chance to work for them based on unlimited beyond rights.' FedEx has five beyond rights through Hong Kong, while UPS has none. Mr Negline did not see the lone tender as an indication of waning confidence in the SAR. Below Deck - Page 8
