FedEx plans to launch services to 100 more Chinese cities

FedEx Corp plans to launch express delivery services to 100 more cities in China and open a distribution hub in the country.

FedEx Chairman and Chief Executive Fred Smith said that he is confident of opening a third Asian distribution hub in Guangzhou, dismissing concerns that the new hub will undermine existing centers in the Philippines and Japan.

‘We think China is a huge opportunity for the company … we have significant expansion plans in the country, reflecting its fantastic growth and unique position as one of the world’s top manufacturing centers,’ Smith said.

FedEx responded enthusiastically about the recent China’s new aviation deal with the US, which allows five additional airlines from each country to serve the US-China market and the number of weekly flights by each side to rise to 249 from the current 54 by 2010.

‘The new flights will greatly enhance the ability to connect customers all over the world with the dynamic Chinese marketplace,’ David Cunningham, president of FedEx’s Asia-Pacific operations, said in a statement, released shortly after the announcement of the aviation deal last Friday.

If awarded additional approvals, FedEx plans to initiate new flights connecting China with the rest of the world, fly to other Chinese cities besides Beijing, Shanghai and Shenzhen, and seek hub expansion opportunities in Guangzhou, the statement said.

A FedEx spokesman in China told AFX-Asia that he has no further information about the new hub and will release more details ‘once everything clarifies.’

FedEx operates 11 weekly flights to China and offers delivery services with a local partner in more than 220 Chinese cities. Its volumes from Asia grew by 22 pct in the fiscal third quarter with China volumes up 55 pct year-on-year.

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