FedEx to Build New Logistics Hub in Shanghai
25-Oct-2012 FedEx Express, a subsidiary of global shipping giant FedEx Corp. (NYSE: FDX), today announced it has signed an agreement with the Shanghai Airport (Group) Company Limited (SAA) to establish a new International Express and Cargo Hub in Shanghai. The new facility, with designated onsite customs clearance, will be located at Shanghai's Pudong International Airport and is slated for completion in early 2017.
"Customers now have more global trade opportunities than ever before and demand for FedEx shipping services, both to and from China, is expected to increase," said Michael L. Ducker, chief operating officer and president, International, of FedEx Express. "By expanding our infrastructure in Shanghai, we will be equipped to handle increased volumes in Asia and ultimately provide our customers with greater and more reliable access to the markets in which they do business."
Establishing a new hub at the Shanghai Pudong International Airport is a strategic move for Memphis-based FedEx. The airport is expected to become the world's top air cargo hub by 2015 and recently received approval to carry out an expansion project that is expected to increase its freight handling capacity to five million tons annually by 2020[1]. When launched, the new hub is expected to more than triple the capacity of the current FedEx facility in Shanghai, allowing it to process up to 36,000 documents and parcels per hour.
As a major economic center of China, Shanghai is a key market for FedEx. Not only has its gross domestic product (GDP) increased by more than 8% over the last three years, but the city's foreign trade volume surged to more than 32% and 18% year-over-year in 2010 and 2011, respectively[2]. The new FedEx hub will help facilitate that growth in international trade, most notably between eastern China and the United States and Europe.
"FedEx currently serves Shanghai with 68 flights a week, both inbound and outbound, including several direct flights between Shanghai, the U.S. and Europe," said Raj Subramaniam, senior vice president, Global Marketing, FedEx Services. "Providing our customers with the connectivity they need is one of our top priorities and through the new hub in Shanghai, we will be able to meet the supply chain needs of our customers around the world."
With an investment of more than $100 million, the new hub in Shanghai is the latest step in an ongoing growth plan to expand FedEx network and service offerings throughout the Asia Pacific region. In August 2012, the company announced the launch of additional Boeing 777 Freighter (777F) routes from Guangzhou and Shanghai in China to Europe. FedEx now operates seven 777F routes connecting Asia to the U.S. and Europe.