Federal Express starts transfer to China

SUBIC BAY FREEPORT – Federal Express (FedEx), the world’s largest cargo delivery service company, has started transfering its entire Asia-Pacific hub operations from the Subic Bay International Airport (SBIA) to a new hub facility in Guangzhou, China.

At about 6:15 a.m. yesterday, the last FedEx cargo flight – an Airbus A310 aircraft – known as “Flight 14” took off for Taipei, Taiwan, after going through the “water curtain” ceremony, with more than 500 FedEx employees stopping their work to say goodbye.

The pullout is expected to affect about 800 employees who work at the Subic hub, which was established here in 1995.

Sen. Richard Gordon, who was chairman of the Subic Bay Metropolitan Authority (SBMA) when FedEx moved to Subic, said the withdrawal was an emotional moment for workers, as well as for him.

“We were happy they were here, but we’re sorry we didn’t have enough of them,” Gordon said.

He also expressed optimism that the FedEx workers in Subic would easily find jobs “anywhere in the world” because they have been trained well by the company.

Meanwhile, SBMA Administrator Armand Arreza clarified that the ceremony was not yet the official turnover of FedEx operations to China, but just the start of the transition period.

“Starting today, FedEx will test run their new facilities in China,” Arreza said. “The transition period would take about two months, or even more,” he said.

Arreza also explained that FedEx’s decision to transfer its Asia-Pacific hub to Guangzhou was made as early as 2004, even before the global economic slowdown last year began to affect Asian economies, including the Philippines.

“The market condition in China dwarfs that of the entire Southeast Asia combined,” said Arreza, citing that China accounts for 60 to 70 percent of Asia’s cargoes.

“Another incentive given by China is that FedEx can handle domestic cargo, or cabotage. The Philippine Constitution allows cabotage for domestic companies only,” added Arreza.

During the transition period, some company officials will remain in Subic Bay to oversee the completion of the company’s re-integration program for its over 500 workers, a company PR officer said.

Arreza said the SBMA attempted to convince the cargo giant to remain in Subic. However, FedEx officials, noting the rise of the Chinese economy in recent years, stuck to their decision, he said.–Bebot Sison Jr., Philippine Star