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Subic Bay Metropolitan Authority (MPD-SBMA)

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07 February 2009

FedEx exits Subic

US delivery giant Federal Express (FedEx) closed its Asian hub in Subic yesterday.

FedEx planes began departing the freeport for various destinations for the last time before dawn, with the last taking off at around six in the morning.

FedEx, which used Subic as base for 14 years, is moving its operations to its new hub in Guangzhou, China.

The company, however, will conduct a re-integration program for more than 500 FedEx workers in the meantime it completes a two-month transition.

Armand C. Arreza, Subic Bay Metropolitan Authority (SBMA) administrator, estimated another 300 people, who are engaged in maintenance, food, janitorial, security and other services, would be affected by FedEx’s pullout.

Overall around 800 direct and indirect workers would lose their jobs after the completion of the FedEx transfer in April, at a time when thousands are getting laid off due to the global economic slump.

The SBMA is likewise bound to lose about P150 million in annual revenues from leased airport facilities and daily aircraft landing fees, among others

Mr. Arreza said the SBMA is currently negotiating with other foreign companies involved in regional transshipment, including a Dubai-based firm, as possible replacement for FedEx.

He also clarified that FedEx would continue its local airfreight and courier services through Airfreight 2100, its exclusive licensee in the Philippines.

Mr. Arreza also stressed FedEx’s decision to transfer its hub to China was made as early as 2004 and did not result from the current global economic slowdown. "The Chinese market dwarfs that of the entire Southeast Asia combined," he pointed out, citing how China accounts 60-70% 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," he added. (Rey Garcia, Businessworld)

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