FedExFlyer
You smell something??
- Joined
- Oct 29, 2004
- Posts
- 196
UPS didnt even apply......duhhh!!
FedEx adds trips to China
By Jane Roberts
Contact
August 31, 2006
FedEx Corp. has received permission to fly four additional weekly round trips into China, giving it a total of 30, more than any U.S. cargo carrier.
UPS, which has 21 routes, did not apply for additional access, surprising Wall Street because they provide access in one of the fastest-growing economies in the world.
"FedEx is always seeking to grow; every time frequencies come up, they apply," said Helane Becker, analyst at Benchmark in New York.
Northwest Airlines and Polar Air Cargo each received four routes.
All are available in March 2007.
Revenue in the parcel delivery business in China is growing about 20 percent a year and is expected to continue at that rate for five years, according to SJ Consulting in Pittsburgh.
Carriers in the region report volume growth close to 30 percent, including recent gains in U.S. exports to China.
Additional flights will "ease some of the capacity constraints we believe FedEx has experienced in certain lanes," Baird analyst Jon Langenfeld said in research note.
While surprised that UPS did not seek more rights, Langenfeld suspects the company is comfortable with its current capacity.
This is the first time since the bilateral agreement with the United States and China was signed in 2004 that not all available routes were assigned. Fifteen were available; 12 were assigned.
UPS, which plans to open an international hub in Shanghai in 2007, said it didn't need more because a hub gives it unlimited access to Shanghai.
"While we are still seeing significant growth in China, we will never request frequencies we don't immediately need," said UPS spokesman Norman Black. "We're not going to play the game of banking frequencies."
FedEx broke ground in January on a $150 million hub at the Guangzhou Baiyuan International Airport in the heart of the Pearl River Valley, the fast-growing industrial area in China. Three years ago, Wal-Mart purchases in the region were worth 1 percent of China's total gross domestic product, according to a data compiled in 2004 by the British Consulate General on Shanghai and Guangzhou.
The area originally attracted toy and textile manufacturers largely because its labor costs were 15 percent lower than in the Yangtze River Delta, which includes Shanghai.
While the Yangtze region in eastern China has nearly the twice the population as the Pearl River region in the south, the value of its 2003 exports lagged Pearl River by $6 billion.
Carriers are finding a growing appetite for American-made goods. Since 2001, the value of U.S. exports to China have nearly doubled, going from $19 billion to $37.6 billion.
According to a survey UPS conducted of middle-class consumers in six cities in China, "made in America is good," Black said. "There's a growing appetite for everything from blue jeans, DVDs, running shoes and moisturizers."
Demand for blue jeans increased from 52 percent in 2004 to 64 percent last year.
"The most-desired American appliances are the washer and dryer," he said. "One third of the respondents said they were likely to purchase a set in the coming year."
FedEx adds trips to China
By Jane Roberts
Contact
August 31, 2006
FedEx Corp. has received permission to fly four additional weekly round trips into China, giving it a total of 30, more than any U.S. cargo carrier.
UPS, which has 21 routes, did not apply for additional access, surprising Wall Street because they provide access in one of the fastest-growing economies in the world.
"FedEx is always seeking to grow; every time frequencies come up, they apply," said Helane Becker, analyst at Benchmark in New York.
Northwest Airlines and Polar Air Cargo each received four routes.
All are available in March 2007.
Revenue in the parcel delivery business in China is growing about 20 percent a year and is expected to continue at that rate for five years, according to SJ Consulting in Pittsburgh.
Carriers in the region report volume growth close to 30 percent, including recent gains in U.S. exports to China.
Additional flights will "ease some of the capacity constraints we believe FedEx has experienced in certain lanes," Baird analyst Jon Langenfeld said in research note.
While surprised that UPS did not seek more rights, Langenfeld suspects the company is comfortable with its current capacity.
This is the first time since the bilateral agreement with the United States and China was signed in 2004 that not all available routes were assigned. Fifteen were available; 12 were assigned.
UPS, which plans to open an international hub in Shanghai in 2007, said it didn't need more because a hub gives it unlimited access to Shanghai.
"While we are still seeing significant growth in China, we will never request frequencies we don't immediately need," said UPS spokesman Norman Black. "We're not going to play the game of banking frequencies."
FedEx broke ground in January on a $150 million hub at the Guangzhou Baiyuan International Airport in the heart of the Pearl River Valley, the fast-growing industrial area in China. Three years ago, Wal-Mart purchases in the region were worth 1 percent of China's total gross domestic product, according to a data compiled in 2004 by the British Consulate General on Shanghai and Guangzhou.
The area originally attracted toy and textile manufacturers largely because its labor costs were 15 percent lower than in the Yangtze River Delta, which includes Shanghai.
While the Yangtze region in eastern China has nearly the twice the population as the Pearl River region in the south, the value of its 2003 exports lagged Pearl River by $6 billion.
Carriers are finding a growing appetite for American-made goods. Since 2001, the value of U.S. exports to China have nearly doubled, going from $19 billion to $37.6 billion.
According to a survey UPS conducted of middle-class consumers in six cities in China, "made in America is good," Black said. "There's a growing appetite for everything from blue jeans, DVDs, running shoes and moisturizers."
Demand for blue jeans increased from 52 percent in 2004 to 64 percent last year.
"The most-desired American appliances are the washer and dryer," he said. "One third of the respondents said they were likely to purchase a set in the coming year."
