US logistics giant, FedEx, said yesterday it plans to build what would be the largest Asia-Pacific air transshipment hub at Guangzhou's Baiyun International Airport.
The company said it will invest US$150 million US dollars in the facility which will have a total floor space of 82,000m2 located on 63 hectares. The new hub will have 1,200 employees and will see 228 flights weekly into and out of the airport at the start-up.
The hub, expected to begin operations in December 2008, will assume and expand the current activities of the hub in Subic Bay, the Philippines, the company said in a statement.
"More than two decades ago, we envisioned China as a nexus of global supply and demand and as a result became the first express carrier to enter the market," Frederick Smith, FedEx chairman, said.
"Today, we further invest in our leadership position by creating a new gateway that expands our customers' access to the global marketplace," he said.
FedEx said it will maintain its presence in the Philippines and is expanding its airport operations in Manila in order to provide back-office functions.
Speaking at a press conference, Smith said the runway in Subic Bay would not be long enough to accommodate its A380 superjumbo jets although its greater consideration was that its future Asia's growth will be in China.
"Growth in Asia will be highly centred on China and Guangzhou, and this gives us flexibility with the A380s," Smith said.
"When the market changes, when growth pattern changes, you have to go where your customers want you to go," he said.
FedEx said the decision to develop the new hub was made following a study that forecast Asia will remain the world's fastest growing regional air freight market, with growth of 8.5 percent each year until 2023. China will be the main factor in that growth due to increasing traffic in semi-finished manufactured goods and steadily rising consumption, it said.
The study also showed air freight from China to the US will grow at an average of 9.6 percent a year over the next 20 years, while traffic to Europe is predicted to grow at 9.3 percent over the same period.
The US$2.4 billion dollar Baiyun Airport in Guangdong Province -- an area dubbed the factory of the world and which is responsible for over a third of China's exports -- has always been seen as a rival to Hong Kong.
Some 80 percent of all freight handled at Hong Kong's airport comes from Guangdong, accounting for more than a quarter of the city's external trade value.
Smith tried to allay fears that Hong Kong's airport will be affected as it will still be its major point of the cargo movement for its air express network.
He also said a landmark aviation deal between China and the US allowing the company to increase its cargo flights between the two makes this deal possible.
Under the agreement, five additional airlines from each country will be allowed to serve the US-China market by 2010, up from the existing four, with the number of weekly flights between each country rising to 249 from the current 54.
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