FedEx Express signed an agreement today with the Shanghai Airport Group to establish a major newexpress and cargo hub at Pudong International Airport, “to enhance connectivity to the US and
Europe for customers in Asia Pacific”.The 134,000 sqm ‘FedEx Shanghai International Express and Cargo Hub’ is slated for completion inearly 2017 and involves an investment of more than US$100 million. FedEx said the new facilitywould meet expansion requirements “for the next 20 years and beyond”.
When completed, the ‘integrated’ facility will boast an advanced sort system with capacity tosort up to 36,000 documents and packages per hour and will have a total of 59 truckdocks. FedEx said it would also have on-site facilitation by the Chinese Immigration Authorityand Shanghai Customs for efficient cargo clearance. The hub will also house the maintenancefacility for FedEx’s ground support equipment (GSE), as well as the area for ULD (unit loadingdevice) staging.
Pudong International Airport (PVG) has risen to become one of the busiest airports in the world,averaging double-digit cargo and express growth over the last 10 years, although a weakening indemand last year saw its cargo volumes slip by around 4.5% to just over 3 million tonnes. In cargoterms it ranks number three in the world, behind Hong Kong and Memphis, FedEx’s global air expresshub.
“The launch of the new hub reinforces our long-term commitment to China, where we already haveour APAC Regional Hub, located in Guangzhou,” said David Cunningham, Asia Pacific president forFedEx Express. “The new facility will further consolidate our operational strength in theregion and is designed to provide FedEx customers with greater and more reliable access to regionaland global trade opportunities.
“With the new facility, we can provide greater connectivity to the US and the EU for ourcustomers and enhance the customer experience,” he added.
FedEx told CEP-Research that the role of its APAC Hub in Guangzhou would remain unchanged, “andwill continue to be the heart of our Asia Pacific operations for the next 30 years. The APAC Hub isthe centre of our comprehensive intra-Asia network, providing delivery services among 22 majorcities in Asia and linking these cities to more than 220 countries and territories in the FedExglobal network,” the company said.
A spokeswoman added: “The new FedEx Shanghai International Express and Cargo Hub enhancesservices in east China, providing greater connectivity to the EU and the US. FedEx currently has 68flights a week in and out of PVG, connecting the AsiaOne 22-city network through the Asia PacificHub in Guangzhou, connecting to the US and global network through Anchorage and Memphis, andconnecting to Europe through Charles de Gaulle Airport in Paris and Cologne in Germany.”
FedEx said it was “committed to providing unparalleled connectivity and delivery services inAsia Pacific by investing in its operational network to enhance the customer experience”. Itoperates seven 777F routes connecting Asia Pacific to the U.S. and Europe, and last month announcedthe launch of additional Boeing 777 freighter routes from Guangzhou and Shanghai toEurope.
The FedEx spokeswoman told CEP-Research that the new hub would be an entirely new facilityrather than an expansion of FedEx’s existing facility at Pudong. “The new hub will be the largestof its kind at Shanghai Pudong International Airport, and will increase the flexibility andreliability of FedEx Asia Pacific network,” she said.
DHL Express and UPS already both have major hubs in Shanghai, with DHL opening its $175 millionNorth Asia Hub at Pudong in July, as part of a €400 million overall investment in China. The88,000 sqm facility has the capacity to process 20,000 parcels and 20,000 documents per hour and isfive times larger than the company’s previous facility at Shanghai. DHL Express also completed a$110 million extension of its air hub at Hong Kong International Airport in September 2008.
The UPS China Hub, directly adjacent to DHL Express’s North Asia Hub at Pudong, opened in 2008.The $125 million facility features 117 conveyor belts and 47 docking bays and has a package sortingcapacity of 17,000 pieces per hour, but was also designed for simultaneous rapid processing ofheavy freight. It is located within a 1.67 sq km cargo area opened by the airport in 2008 that hasparking space for 38 freighters.
Shanghai Pudong International Airport has ambitions to become the world’s top air cargo hub by2015, and the airport’s freight capacity is expected to reach 5 million tonnes annually by 2020,according to the Pudong New Area Government.
FedEx observed that Shanghai had also maintained a GDP growth rate of more than 8% in the lastthree consecutive years, with foreign trade volumes in Shanghai alone surging by 32.8% and 18.6%year on year respectively in 2010 and 2011, according to the Shanghai Municipal StatisticsBureau.
