Federal Express allots USD450mln for Philippine hub
The worlds largest cargo forwarder Federal Express (FedEx), has alloted USD450 million to relocate its hub in Asia by 2007 to the Diosdado Macapagal International Airport (DMIA) from its present site at the Subic Bay International Airport (SBIA).
FedEx has a 12-year lease contract with the Subic Bay Metropolitan Authority (SBMA). Though its contract has yet to expire in 2007, the firm needs to start constructing its new hub in Clark this year to ensure smooth transition of its cargo operations.
Adelberto Yap, president and chief-executive-officer of Clark International Airport Corp. (CIAC), said FedEx has yet to maintain Subic for two years after 2007 for scaling down operations.
Yap said FedEx decided to transfer to a 42-45-hectare site in Clark because the space it occupies in Subic is not big enough to accommodate its expansion programs.
They had to leave Subic because they could no longer expand. Subic is primarily for port terminals, Yap said.
He said he will go to Memphis, Tennesee, where FedEx is based, to have the 25-year lease contract signed.
Yap added that FedEx chose the Philippines over China because of cheap but skilled labor here.
FedEx also seems to like the work culture of the Filipinos who can adopt readily to the Americans. FedEx has no problem communicating with the locals.
They also chose the Philippines over China because they prefer doing business with the Philippine government.
Also, in Clark, we already have a two-runway capacity built by the Americans so they can start right away unlike in Guangzhou, China where they still have to build it, Yap pointed out.
In August 2003, FedEx signed a letter of intent with the Guangzhou airport authority for the supposed relocation of its hub from the Philippines after transport officials here reportedly junked in July 2003 their US counterparts demand to allow seventh freedom operations in the country.
Seventh freedom rights allow a carrier to fly to other destinations from a particular hub without first passing its home base. The Philippines said this is a violation of the Constitution and the RP-US Air Transport agreement.
To avert FedEx’s move, President Gloria Macapagal-Arroyo signed Executive Order 243 in December 2003 declaring open skies in cargo in SBIA and DMIA.
Subic Bay became FedExs Asia Pacific Hub in September 1995, connecting 19 key Asian cities.
The hub enables overnight delivery to the US West Coast from Penang, Singapore, Kuala Lumpur, Manila and East Timor.
