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Get ready for the (next) Asian trade revolution

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When I moved to Asia in 1994, the most common shipment was electronics.

Think big and expensive. The first, mass-produced PCs were spreading like wildfire, and innovations like the “personal communicator” – dubbed “bricks” due to their size and weight – were starting to take off.

I vividly remember those days. Around five years earlier, I’d been involved in the FedEx purchase of Asia’s Flying Tigers airlines, which as far back as the 1940s was known by its tagline – “We haul anything anywhere.”  It was a critical acquisition for us because it gave us the air rights and the authority to connect Asia globally.  

But there was a much different tiger on the scene by the time I arrived in Hong Kong. Back then, it was all about the “tiger” economies – Hong Kong, Japan, Taiwan, Singapore and South Korea – all, by that time, major manufacturing locations.

2It was also all about the big corporations – multinationals who were driving export growth and trade out of Asia. Complex supply chains were just coming into their own, and we were quite literally “running in front of the parade” to help companies get their revolutionary products to market. 

Twenty years on, some things don’t change.

We’re still shipping a huge amount of high-tech – although it’s now much smaller items, built around product launches and new devices.

Yet take a closer look and it is more than that. The contents on our planes are as diverse as the countries we deliver to. It’s luxury goods, e-commerce, high-value perishables, and aerospace. In addition, there’s significantly more healthcare and pharmaceutical shipments than ever before – clinical trial samples, biotech and medical devices.

Another remarkable change has been in our customers. While trade has always been part of Asia’s DNA, there’s now many more small businesses who are changing where and how the world does business. It’s also about the new breed of Asian companies that are going regional, or global, from day one, and big industry and vertical segments.

Change runs even deeper if you consider the ways in which global transportation is changing. Because we transport by air, land and sea, we bear witness to global trends affecting our industry. And what we’re seeing is a shift in transport modes, an evolution of our industry in which air express and air cargo is just one player.

Ocean freight is an increasingly important part of a shipper’s overall equation, with large commodity consignments often going by sea, and dedicated express networks capturing urgent, lightweight shipments.

3As dramatic as it sounds, some of the most significant shifts in Asia’s trading landscape have happened over the past five years. For instance, China’s evolution into the world’s biggest exporter, a “mega trader” on the world scene, and a driving force in world trade.

Yet what is often overlooked in this realignment of global trade is the interplay and the interconnection between all countries, not just major economies. Manufacturing today requires a very sophisticated supply chain, in which hundreds of critical parts are spread across suppliers, often not just in several countries in Asia, but several continents. In other words, it's not just about China.

Take the now ubiquitous smartphone as a prime example. It might be designed in California, with parts made in Taiwan, assembled in China, shipped through Singapore, loaded with apps from Korea, and sold in Indonesia.

Yet what’s most interesting is the question of where we will be in another five to 10 years from now. In many ways Asia is just getting started in this global trade revolution. So who will emerge as the "tigers of tomorrow" in Asian trade?

My money is on the “tigers”, whether it be economies or businesses, who are the most agile in capitalizing on change.

Comment (1) 

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Before joining FedEx I knew Flying Tigers from SFO where my Father worked for United Airlines. I do wish I had joined FedEx before I did because I know so much about the Company.

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