FedEx considers Seoul’s Incheon Airport as operations hub

FedEx Corp. is considering plans to make Incheon International Airport into one of its critical operations hubs in Asia, the government’s Planning Office of the Free Economic Zone said.

The planning office said that as part of this overall plan, the global shipping company has increased the number of weekly flights it operates out of Incheon from 13 to 20 as of Jan 6. Of these, five will fly directly to Subic Bay in the Philippines, which means that South Korea’s importance as a business center for the company will increase.

The U.S.-based company uses Subic Bay as the main shipment and transportation center for parcels and documents it handles in Asia, while Tokyo and Singapore are used as middle distribution centers.

In the past, shipments coming into or leaving South Korea went through Tokyo’s Narita Airport.

In addition, FedEx said that it will expand its 2,000-pyeong (6,600-square-meter) freight terminal in Incheon into a distribution center that handles both storage and packaging.

This, it said, not only means enhanced services for local customers, but signifies that South Korea is making inroads in its bid to become the regional transportation hub for Northeast Asia.

Cho In-kang, the director general for the free economic zone office, said FedEx’s move showed the advantages of Incheon over its rivals.

He said that the express delivery company, with more than 600 planes and a top market share, is interested in Incheon because of its geographical location, economy of operations from a state-of-the art airport that possesses growth potential and continuous efforts at deregulation designed to help businesses. The official also said that designating the airport and its support facilities as free economic zones helped.

“FedEx’s latest move, coupled with similar actions or considerations being undertaken by DHL, TNT and UPS, testifies to the growth ability of Incheon and to a larger extent, South Korea,” Cho said. He said that the growth will take time, especially because FedEx was not using Incheon as a stepping stone to ship parcels to other destinations in Asia.

DHL, the market leader, said it will build a 6,800-pyeong distribution center at Incheon, while TNT, an express carrier operating out of Amsterdam, said it planned to construct a freight terminal at Incheon.

On the other hand, experts at the planning office conceded that the increase in flights and expansion or building of freight and distributions centers did not mean that the country was going to become a transportation hub overnight. They also said that for the moment, Seoul may be gaining on Narita, which is limited in its expansion, but is vying with emerging business centers such as Shanghai.