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2002 Press Releases
HONG KONG, September 18, 2002 - FedEx, the world's largest express transportation company, today joined a panel of industry leaders at the International Air Cargo Forum 2002 to discuss key trends in the global marketplace.
Speaking on the topic of free trade and "open skies," Mr. David L. Cunningham Jr., President of FedEx Asia Pacific, explained that both free trade and open skies are vital necessities for world prosperity and should be inseparable and function like Yin and Yang. Free trade allows more business opportunities enabling commercial service providers to manufacture and sell goods at any market with a liberalized economy.
Explaining the relationship of air express to free trade, Mr. Cunningham noted that air express is the "circulatory system" of the global economy. "The need for air express is even more essential to carry out these operations with the emergence of macroeconomic trends including high-tech, high value-added production, fast-cycle logistics and e-commerce", said Mr. Cunningham. "The rapid advance of information technology in business enables the purchase and sale of products anywhere, further influencing the supply chain system."
The demand for global air transportation is rising. Air cargo is predicted to triple in the major world markets over the next 15 years while the air express portion will increase six-fold and is estimated to soar by 13 percent per year, reaching 36 percent of total air tonnage by 2019. Hence, air transportation has never been more important in providing the solutions that will make the challenges of globalization and the increasingly interdependent economies vastly more manageable.
"Nonetheless, the operating environment of the air express industry is still far from ideal," explained Mr. Cunningham. "Carriers are not able to circulate as freely as they would wish or as the market or the pace of globalization demands because of the restrictive air regimes in some countries. The changing trend of air travel towards more point-to-point routing makes open skies even more necessary. Efficient global air transport relies heavily on the use of hubs and "open skies" is crucial to the operation of such hubs. Simply put, customers can get their products moved from one country to another faster and cheaper. Overall, open skies countries benefit because cargo airports or hubs stimulate economic growth in the regions they serve and attract clusters of businesses dependent on timely and efficient distribution systems."
According to Mr. Cunningham, "open skies" poses many challenges. Competition apart, airport infrastructure will have to be expanded and upgraded with a sound IT environment, 24-hour operations, air rights and convenient access, streamlined fast customs procedures, skilled workforce, low operating costs and reasonable fees and charges. However, without open skies, the companies in those countries will not be able to take advantage of fast cycle logistics.
The challenges of open skies are the challenges of globalization. However, a 1998 study sponsored by WTO found that global trade and investment flows have come to countries that have more rapidly liberalized their economies, allowing them to close the rich-poor gap.
In conclusion, Mr. Cunningham noted that all these challenges can and should be tackled head-on because the new opportunities out there far outweigh the challenges. "With open skies, air express carriers can truly play their natural role as the circulatory system of the global economy to their benefit. Hence, it is important for air express services providers and governments to work together to strengthen free world trade and improve standards of living."
With annual revenues of $21 billion, FedEx Corp. is the premier global provider of transportation, e-commerce and supply chain management services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Freight, the largest U.S. provider of regional less-than-truckload freight services; FedEx Custom Critical, North America's largest provider of expedited time-critical shipments; and FedEx Trade Networks, a provider of customs clearance, international freight forwarding and trade facilitation.
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