FedEx Considers Incheon for Operations Hub

January 7, 2004

FedEx Considers Incheon for Operations Hub 
Asia Times Online, Hong Kong

SEOUL - FedEx Corp is considering plans to make Incheon International Airport 
into one of its critical operations hubs in Asia, the government's Planning 
Office of the Free Economic Zone said on Wednesday. 

The planning office said that as part of this overall plan, the global shipping 
company has increased the number of weekly flights it operates out of Incheon 
from 13 to 20 as of January 6. 

Of these, five will fly directly to Subic Bay in the Philippines, which means 
that South Korea's importance as a business center for the company will 
increase. The United States-based company uses Subic Bay as the main shipment 
and transportation center for parcels and documents it handles in Asia, while 
Tokyo and Singapore are used as middle distribution centers. 

In the past, shipments coming into or leaving South Korea went through Tokyo's 
Narita Airport. 

In addition, FedEx said that it will expand its 2,000-pyeong 
(6,600-square-meter) freight terminal in Incheon into a distribution center 
that handles both storage and packaging. This, it said, not only means enhanced 
services for local customers, but signifies that South Korea is making inroads 
in its bid to become the regional transportation hub for Northeast Asia. 

Cho In-kang, the director general for the free economic zone office, said 
FedEx's move showed the advantages of Incheon over its rivals. He said that the 
express delivery company, with more than 600 planes and a top market share, is 
interested in Incheon because of its geographical location and economy of 
operations from a state-of-the art airport that possesses growth potential and 
continuous efforts at deregulation designed to help businesses. The official 
also said that designating the airport and its support facilities as free 
economic zones helped. 

"FedEx's latest move, coupled with similar actions or considerations being 
undertaken by DHL, TNT and UPS, testifies to the growth ability of Incheon and 
to a larger extent, South Korea," Cho said. He said that the growth will take 
time especially because FedEx was not using Incheon as a stepping stone to ship 
parcels to other destinations in Asia. 

DHL, the market leader, said it will build a 6,800-pyeong distribution center 
at Incheon, while TNT, an express carrier operating out of Amsterdam, said it 
planned to construct a freight terminal at Incheon. 

On the other hand, experts at the planning office conceded that the increase in 
flights and expansion or building of freight and distributions centers did not 
mean that the country was going to become a transportation hub overnight. They 
also said that for the moment, Seoul may be gaining on Narita, which is limited 
in its expansion, but is vying with emerging business centers such as Shanghai. 
 
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