Sunday, November 29, 2009

FedEx's Asia Pacific hub


The Baiyun International Airport in Guangzhou serves as a comprehensive intra-Asian network providing next business day delivery services among 22 major cities in Asia

GETTING millions of packages from point-to-point and having them arrive on time is no mean feat.But for the world's largest express transport company Federal Express (FedEx), the delivery of these packages - whether they are technology gizmos, chemicals, food items or documents - in a safe and efficient manner is all in a day's work, around the globe.In Asia Pacific where FedEx has been present since 1984, the Baiyun International Airport in Guangzhou, southern China, serves as the new "home" for the company's regional hub.From the moment you arrive at this US$150 million (RM522 million) spanking new facility, it is easy to get carried away by the buzz of activities wrapping the place, even in the dead of the night. Located on the east side of the international airport's passenger terminal, the hub is sprawled over 63ha and has more than 800 people on its payroll. Logistics giant FedEx closed down its Asia Pacific air transhipment hub in the northern Philippines at Subic Bay earlier this year and moved to China.Subic became the regional hub of FedEx's Asia Pacific operations in 1995 after the closure of the US naval base in 1992.The new hub is described by the company as a comprehensive intra-Asian network providing next business day delivery services among 22 major cities in Asia - including Penang and Kuala Lumpur - and linking these cities to over 220 countries and territories in FedEx's global system. A total of 136 flights using MD-11 and Airbus 310 aircraft land at Baiyun airport each week, where the hub boasts of facilities which include the ability to sort up to 35,000 packages and documents per hour using state-of-the art technology which is teamed with manual work carried out with precision and little room for error. "This facility has been built for expansion and will be the centrepoint for our business for the next 20-30 years," FedEx Asia Pacific's vice-president for planning, engineering and support Dennice Wilson told visiting Malaysian journalists recently. This, she notes, is in contrast to the Subic facility which was able to sort 12,000 packages and documents an hour and operated on a completely manual process. In addition to the new hub's unique package and sorting system which is made up of high-speed sorting lines, conveyor belts, along with primary and secondary document-sorting splits, FedEx's Guangzhou hub features a ramp control tower - which is a first for an international air express cargo company facility in China. It also boasts a dedicated security guard force, customs examination area and customs offices, along with showers, locker rooms, canteen and food services for its employees. Baiyun airport currently has three runways, with the third runway leased to FedEx. With five runways outlined in the airport's masterplan, a fourth one is slated for completion by 2010.Wilson notes that the infrastructure of Chinese airports is very good and is pleased that FedEx has been part of the authorities' masterplan in Guangzhou by saying that the goals of the company and those of the local authorities' are "very much aligned.""We are positioned now with everything we need and we hope that business grows around the hub since it is the interest of us, the government and our customers," she adds, saying that the geographical position in southern China for the hub was perfect for FedEx's hub-and-spoke system. Hub-and-spoke is a transportation system design in which large hub terminals are used for freight consolidation.FedEx Asia Pacific president David Cunningham Jr said FedEx is in the region for the long term and will continue investing, in a bid to facilitate global trade. "This is not the first economic cycle we have been through," he told reporters when met in Hong Kong, adding that the new Boeing 777 planes which the company has committed to is one example of the company's commitment to continuously supporting trade in this part of the world. FedEx was reported earlier this year to have 30 Boeing 777 planes on order, with an option to order 15 more. Wilson said some of the aircraft currently in use at Baiyun will be replaced with the new 777's which are more efficient planes and can go further. "We will get the first three flights of 777 in Asia Pacific next year and then transition some of the MD-11's," she added. With its vantage position of operating away from the cargo complex in its stand-alone hub and the addition of more runways at the airport, FedEx is poised to stand out as one of the more important players in the growth of Baiyun, which is on its way to becoming the largest airport in China's Pan-Pearl River Delta.