About FedEx
Press Releases

July 25, 1997

Federal Express Introduces New Service to Laos

HONG KONG, July 25, 1997 -- Federal Express Corporation (FedEx) announced the launch of its service to Laos, making Laos the latest addition to the FedEx global network now covering 212 countries. Consignees in Laos can enjoy FedEx's superior inbound FedEx International Priority^® (IP) service with a new line-haul connection through the company's operations in Singapore.

FedEx's service to Laos was made possible by an agreement between FedEx and Entreprise Des Postes Lao (EPL), a local express pick-up and delivery company in Laos. This agreement is the first of its kind for an international air express company and a government agency in that country. EPL is under the jurisdiction of Laos' Ministry of Telecommunications, Construction and Transportation.

The new service covers the country's capital city, Vientiane, and five major provinces. EPL provides a team of trained, uniformed couriers and a fleet of vans, all decked in FedEx livery. EPL also provides information management, supported by a group of customer service agents and account executives, as well as credit collections, accounting and customs specialists.

Laos is connected with COSMOS, FedEx's main computer system which FedEx uses to provide customers with real-time tracking status of their shipments. Trace capability is provided both through the FedEx Vientiane office located within the EPL main facility on Lang Xang Avenue and directly through the Internet.

"The introduction of our Laos service and the opening of our facility in Vientiane represent landmarks in meeting ever-increasing needs in newly developing markets. Together, FedEx and EPL offer the business community in Laos outstanding world-wide connectivity within Asia and to the rest of the FedEx global network, coupled with EPL's in-depth knowledge and experience in the local market," said Michael L. Ducker, senior vice president for FedEx's Asia Pacific Division.

"Laos can now be connected to the FedEx AsiaOne^® network, a system we feel is the most comprehensive intra-Asian overnight service, through Singapore to our Asia Pacific Hub in Subic Bay, Philippines. In this way, FedEx customers with shipments into and out of Laos will be able to significantly increase their competitiveness by reaching more markets faster with FedEx's speed and reliability," he added.

"EPL is a well-established, government-backed company with an excellent domestic network. Its experienced management team has a proven track record in express pick-up and delivery, and has the capability to further expand FedEx's service throughout Laos as economic development continues, " said Rhicke Jennings, managing director for Southeast Asia.

FedEx currently services the Asia Pacific market with approximately 4,300 employees in more than 30 countries and territories. Operating its own wide-bodied MD-11, DC-10 and A310 aircraft, FedEx offers over 160 flights per week to the following locations: Beijing, Hong Kong, Kaohsiung, Kuala Lumpur, Manila, Osaka, Penang, Seoul, Shanghai, Singapore, Subic Bay, Taipei and Tokyo.

Federal Express is the world's largest express transportation company providing fast and reliable services for more than 2.8 million items in 212 countries each working day. The company employs approximately 130,000 people, has nearly 43,000 drop-off locations, and operates more than 580 aircraft and 38,000 vehicles in its integrated global network. FedEx maintains electronic connections with more than 650,000 users via FedEx PowerShip^®, FedEx Ship^® and FedEx interNetShip^SM. Federal Express reported revenues of U.S.$11.5 billion for its fiscal year ended May 31, 1997.

FedEx
Country Manager:	Binh Nguyen, senior manager, IndoChina
Service:	Inbound FedEx International Priority® service begins on July 1, 1997; Plan to launch outbound service in January 1998
No. of Offices:	1 - at Lang Xang Avenue, Vientiane
No. of Employees:	8
Vehicle Fleet:	1 van 5 motorcycles
GSP:	Entreprise Des Postes Lao (EPL) - a domestic pick-up and delivery company with an extensive network and experience in Laos. Headed by Mr Bounchen Siripphanchanh. Comes underthe jurisdiction of the Ministry of Telecommunications, Construction andTransportation.
Contract with GSP:	- Negotiations started December 1996
	- Agreement signed in April 1997
	- Start of service in July 1997
	GSP will provide delivery and pick up for Vientiane and five major provinces in Laos. GSP will also provide information management.

INTERNAL Q&A: Laos announcement

1. What were the reasons behind your movement into Laos?

• FedEx's vision of global connectivity - since 1973, we have sought to connect the world with our time-certain express delivery service. We began with about 25 packages within the U.S.; now, we transport more than 2.8 million packages between 212 countries every day.
• Laos has tremendous potential. Steps are being made to restructure its economy. Investments have been made in key industrial activities, particularly in the fields of power, mining, wood processing, garment-making, furniture-making and biological fertilisers. Tourism is growing - visitor numbers have doubled from 1993, with expenditures no less than US$20 million per year. The nation's per capita GDP has also increased by 6.4 per cent over the last five years to US$350.
• As the economy continues to open, more trade and foreign investment are sure to develop, particularly as a direct result of changing manufacturing bases to less industrialised countries. This translates into an increased movement of people and goods.

2. What difficulties do you envisage with the Laos market?

• Laos is a newly emerging market. Like any new market in IndoChina, one of the key challenges is infrastructure. The air express industry has demanding requirements for infrastructure - good road network, customs clearance, telecommunications, airport systems, etc. - this is because products need to be shipped fast and on time. Laos is just beginning to emerge; it is working hard to develop its infrastructure.
• We are very encouraged by the actions of the Laos government - improvements have been made to the Vientiane and Luang Prabang airports, in line with the air transport development master plan; new international flight routes were opened, allowing international airlines to operate flights to Laos; and the telecommunication project phase II was completed, namely the microwave system in major urban areas and the Vientiane - Hong Kong satellite earth station, which have facilitated and increased domestic and foreign communications. More are being planned...so we expect that their infrastructure will develop over time.
• The other challenge is to work out a faster customs clearance process with the authorities. Countries such as Laos are unaccustomed to rapid customs clearance procedures necessary because of the sheer volume of shipments passing through. Also, they do not have the electronic mechanisms in place to pre-clear shipments. This again, will take time, and we will work with the relevant authorities to help expedite this.
• We do, however, have a very good ally in Laos, the Entreprise Des Postes Lao (EPL), which has the management know-how, experience and network to expand FedEx's services in Laos.

3. What are your short term and long term plans?

• Laos plays a role in the future of FedEx as it is an emerging market & as it continues to build its manufacturing industry. We have made the first step in Laos, by signing the agreement with EPL in April this year, and beginning our inbound service into Laos through Singapore in July 1997. We will serve Vientiane and five major provinces in Laos. Short term plan: Establish our market presence in Laos. To demonstrate to customers in Laos the excellent service FedEx provides.
• Long term plan: Introduce outbound service from Laos, hook it up with our FedEx AsiaOne network. Expand the FedEx AsiaOne network, which is used to provide services to, from & within Asia. This includes next business day delivery to 13 Asian commercial centers: Beijing, Shanghai, Seoul, Singapore, Tokyo, Osaka, Manila, Hong Kong, Subic Bay, Penang, Kuala Lumpur, Kaohsiung & Taipei; links with FedEx global network.

4. It is rumored that the U.S. government may grant Most Favored nation (MFN) status for Laos. How do you think that will impact on your business?

• If MFN status is accorded to Laos, the level of investments from US companies is most likely to increase from current levels. Presently, the U.S. is ranked among the top 3 foreign investors in Laos with 36 projects (valued at US$1.5 billion).
• Obviously, MFN status will have a beneficial impact on FedEx, because trade and movement of people will increase between Laos and the U.S., and intra-Asia as well.

5. What do you think are the prospects for growth for Laos? Do you think it will become a center for business in Asia?

• We are optimistic about the growth prospects for Laos. Laos has just received about US$1.2 billion pledges of aid from international donors to promote the development of the country until 2000. The country plans to rise above the ranks of least developed country status by 2020.
• Investments have been made in crucial sectors of the economy – electronic power, construction, telecommunication and transport. These are vital areas for a developing country, and Laos is doing so.
• Future projects being planned and implemented include:
  • construction, improvement and upgrading of inter-provincial and district roads
  • further improvement of the Wattay airport to allow B747 landing & feasibility study on the construction of a new international airport
  • investments in infrastructure for Lao Tourism Year 1999
• Investments – The air express industry is relatively new to Laos. In the past, there has been heavy reliance on air freight, not air express. As the economy opens and investments are made to improve local infrastructure, the air express industry expected to grow tremendously.