FedEx delays opening of Guangzhou hub

The new intra-Asian hub for FedEx at Guangzhou's Baiyun International Airport will not come on stream until some time next year. The integrator announced that the US$150 million facility would open in the first half of 2009, not before the end of this year, as originally planned.
Until the Baiyun hub becomes operational, FedEx will continue to use its present regional hub in Subic Bay. The Philippine hub has only half the capacity of the new Baiyun set-up, which was designed to handle 24,000 packages in an hour.
In the current economic climate, which has taken a heavy toll on air cargo volumes, FedEx should be comfortable with the capacity of Subic Bay. Air freight throughput in Hong Kong has declined steeply in recent months. In October, traffic at Hong Kong Air Cargo Terminals Ltd (Hactl), the airport's pre-eminent handler with over 70 percent market share, was down 9.8 percent, due to a 13.6 percent drop in imports and 10.7 percent fall in exports with transhipments down two percent.
Load factors and yields out of the Pearl River Delta have come under pressure, even though capacity grew less than previously expected. Northwest Airlines pulled its freighters out of Guangzhou this past summer, which the US airline had developed as an alternative to Hong Kong. Shenzhen-based Jade Cargo Airlines finally managed to bring its flight crew numbers to a level that permitted full utilisation of its aircraft fleet but decided to lease one freighter to Singapore-based Jett8.
Cathay Pacific's new Hong Kong cargo terminal may open later than scheduled. Construction of the $619 million facility commenced in September with a view to opening for business in the second half of 2011.
Stanley Hui, chief executive officer of the Hong Kong airport authority, warned in October that in the difficult environment and shrinking demand, "airlines are expected to scale back their operation or put on hold their expansion plans".
FedEx Asia-Pacific president David Cunningham stressed that the delay in the opening date of the hub was due to the complexities of the project itself and is not related to the current global economic conditions.
"The new operations date will provide FedEx the necessary time to fully test all systems and processes and work with the Guangzhou authorities to put all necessary approvals in place,'' he said.
The revised schedule would pose no service impact to FedEx customers as the current hub in Subic Bay would continue its operations, Cunningham said. 
A FedEx spokesman said: "The Guangzhou hub has been one of the most sophisticated projects the corporation has engaged upon and it's just a matter of necessity to take more time to deal with the complexities.''
FedEx's regional hub will be equipped with its own ramp control tower - the first for an integrator in China. The facility has 16 high-speed sorting lines, seven conveyor belts and about 90 document sorting splits.
The integrator has commenced operations testing for the Baiyun hub, including the Hong Kong-Guangzhou cross-border transportation processes, sort systems and flight operations.
Rival UPS began construction of its planned new intra-Asia hub at Shenzhen in late October. The new hub, which replaces Clark in the Philippines, is scheduled for opening in 2010.