FedEx Asian hub still six years away as hurdles remain

Federal Express (FedEx), Asia's No2 courier company by sales, does not expect its new Asia-Pacific hub to open for at least six years, according to depositions it made to the United States Department of Transportation at the weekend.

The company, which is courting the managers of airports in Guangzhou and the Philippines, said hurdles such as operating and customs agreements had to be overcome before construction of a 'major physical plant, representing an extremely significant investment', could begin.

FedEx was responding to official queries from rival United Parcel Service (UPS) about why it had applied for more flights to Shenzhen next month under the new Sino-US air services agreement if Guangzhou was the 'frontrunner' to become its Asia-Pacific hub.

'As the department and UPS are well aware, FedEx anticipates it will not open its new Asia hub until around 2010,' it said in a statement to the Department of Transportation. 'FedEx hopes to reach an agreement with the relevant Chinese officials so that it can make a real, meaningful investment in the airport, the surrounding area and its economy, and the Chinese people.'

In the past three months, the Memphis-based firm has extended a lease at its present hub in Subic Bay to 2010, agreed to a four-year option on a site at the nearby Diosdado Macapagal International Airport and signed a framework agreement with the Guangzhou Baiyun Airport Authority.

Last week, it applied to the Department of Transportation to double its weekly round-trip flights through Shenzhen to 12.