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FedEx Has License Revoked By Philippine Court  
User currently offlineLAXintl From United States of America, joined May 2000, 24312 posts, RR: 47
Posted (8 months 3 weeks 4 days 12 hours ago) and read 12738 times:

Good thing its Asia hub its not there any longer.

So how has FX operated the last 30-years and this not be an issue?


FedEx Express has found itself on the wrong side of a court decision in the Philippines and faces the prospect of not being able to conduct its operations anymore in the country, after the Republic's Court of Appeals ruled to void its operating license.

The court of declared as 'unconstitutional' the operation in the Philippines of Federal Express Pacific Inc., the Philippine express division of FedEx Corp. The court denied the company's appeal to reverse its 23 January decision declaring FedEx is a foreign corporation and hence could not engage in international airfreight forwarding within the country.

FedEx said in a statement that it intended to continue operating in the Philippines pending further appeal to the Supreme Court.



Story:
http://www.payloadasia.com/article/f...e-revoked-by-philippine-court/8748

=


From the desert to the sea, to all of Southern California
23 replies: All unread, jump to last
 
User currently offlinemtnwest1979 From United States of America, joined Nov 2005, 2390 posts, RR: 1
Reply 1, posted (8 months 3 weeks 4 days 12 hours ago) and read 12591 times:
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If it were me running FedEx Corp, I'd say adios to the Philippines. Probably don't contribute much to overall revenue stream anyway.


"If it ain't broke, don't fix it!"
User currently offlineAA7295 From Australia, joined Aug 2007, 615 posts, RR: 0
Reply 2, posted (8 months 3 weeks 4 days 11 hours ago) and read 12452 times:

Really great advertisement for foreign businesses looking to invest in this developing economy.

User currently offlineairportugal310 From United States of America, joined Apr 2004, 3447 posts, RR: 2
Reply 3, posted (8 months 3 weeks 4 days 11 hours ago) and read 12406 times:

Just another shining example of how things (don't?) work in the Philippines...


hit it and quit it
User currently offlineAkiestar From Philippines, joined May 2009, 768 posts, RR: 0
Reply 4, posted (8 months 3 weeks 4 days 11 hours ago) and read 12347 times:

The weird thing here is that FedEx has a local partner, Air21, which handles all of their domestic forwarding. If I'm not mistaken, courier services in the Philippines is considered a public utility, and so public utilities must be wholly Filipino-owned under the Constitution (something which I hope will change as Congress wants to pursue amendments to the Constitution). As far as I know, FedEx only flies from points outside the Philippines to points inside, and then Air21 does the actual legwork of processing and delivery.

Quoting mtnwest1979 (Reply 1):
If it were me running FedEx Corp, I'd say adios to the Philippines. Probably don't contribute much to overall revenue stream anyway.

On the contrary, they do. Otherwise, they wouldn't have been based in SFS before they decided that "oh, you know, China's the next big thing, so let's move to China".

Just because we're poor doesn't mean we're not profitable.


User currently offlineikramerica From United States of America, joined May 2005, 21414 posts, RR: 60
Reply 5, posted (8 months 3 weeks 4 days 11 hours ago) and read 12257 times:

Quoting Akiestar (Reply 4):
On the contrary, they do. Otherwise, they wouldn't have been based in SFS before they decided that "oh, you know, China's the next big thing, so let's move to China".

Could this be political payback for the move?



Of all the things to worry about... the Wookie has no pants.
User currently offlineLAXintl From United States of America, joined May 2000, 24312 posts, RR: 47
Reply 6, posted (8 months 3 weeks 4 days 11 hours ago) and read 12095 times:

FX has been gone from the Subic hub for like 5-years.


From the desert to the sea, to all of Southern California
User currently offlinezeke From Hong Kong, joined Dec 2006, 8638 posts, RR: 75
Reply 7, posted (8 months 3 weeks 4 days 9 hours ago) and read 11801 times:

Quoting Akiestar (Reply 4):

Sounds to me more like most multi-nationals, they are somehow moving expenses around to avoid having to pay tax to the host country. This was specific about the international freight forwarding, not domestic, maybe they structured the business in such a way that it so effectively nil duty paid to the Philippines. As I understand it the local law says the international freight forwarders have to be majority locally owned, therefore paying local tax.

Would not be the first or last multi-national not keeping up with local tax regulations to be caught by their own local business "structure".



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently onlineltbewr From United States of America, joined Jan 2004, 12878 posts, RR: 12
Reply 8, posted (8 months 3 weeks 4 days 8 hours ago) and read 11470 times:

On has to wonder if some politicians are involved in this 'decision', so that FedEx has to sell off it's Philippians assets for a cheap price to a local to their 'friends' and they get a cut (ie: bribe).

User currently offlineDTW2HYD From United States of America, joined Jan 2013, 1370 posts, RR: 2
Reply 9, posted (8 months 3 weeks 4 days 8 hours ago) and read 11459 times:

There is no disadvantage for FedEx. Just need to have a exclusive local partner. It is very common in countries where foreign companies are not allowed in domestic logistics sector. India used to be the same. Only in 2006 FedEx started fully owned local subsidiary. DHL is called BlueDart DHL.

User currently offlineAkiestar From Philippines, joined May 2009, 768 posts, RR: 0
Reply 10, posted (8 months 3 weeks 4 days 8 hours ago) and read 11407 times:

More information on the case from the Inquirer: http://business.inquirer.net/133641/...perate-in-ph-appellate-court-rules

Quoting ltbewr (Reply 8):
On has to wonder if some politicians are involved in this 'decision', so that FedEx has to sell off it's Philippians assets for a cheap price to a local to their 'friends' and they get a cut (ie: bribe).

If they were involved, the media would already be talking about it. (Right now, I don't think politicians in the Philippines want to be involved in any more scandals, especially after that LJN scam cost the public purse P10 billion.)

Quoting DTW2HYD (Reply 9):
There is no disadvantage for FedEx. Just need to have a exclusive local partner.

I mentioned that FedEx already has an exclusive local partner for the Philippines: Air21.


User currently offlinemtnwest1979 From United States of America, joined Nov 2005, 2390 posts, RR: 1
Reply 11, posted (8 months 3 weeks 4 days 7 hours ago) and read 11237 times:
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Quoting Akiestar (Reply 4):
they wouldn't have been based in SFS before they decided that "oh, you know, China's the next big thing, so let's move to China".

There ya go. Left once, make it a total break this time ......



"If it ain't broke, don't fix it!"
User currently offlinecrownvic From United States of America, joined Oct 2004, 1793 posts, RR: 5
Reply 12, posted (8 months 3 weeks 4 days 7 hours ago) and read 11099 times:

Quoting Akiestar (Reply 4):
Quoting mtnwest1979 (Reply 1):
If it were me running FedEx Corp, I'd say adios to the Philippines. Probably don't contribute much to overall revenue stream anyway.

On the contrary, they do. Otherwise, they wouldn't have been based in SFS before they decided that "oh, you know, China's the next big thing, so let's move to China".

Just because we're poor doesn't mean we're not profitable.

Akiestar, while your posts are generally informative, you should probably look into the primary reason Fedex pulled out of Subic years ago. I read the whole article several years back and just do not remember what publication it was in. Like so many other foreign investors in the Philippines, politics, red tape and broken promises take a toll and the "marriage" ends. Subic was no exception. FedEx was promised many things, if they came to Subic. The problem was, FedEx got left holding the bag with all the upgrades the airport needed and got only a fraction of what they were promised. Then there was the issue of moving crews between MNL and Subic. A highway was promised, but delay after delay forced them to fly many of these crews on light a/c...After awhile, other tensions grew and like so many other American companies, they left the Philippines.

Hey, I love the Philippines and there have been some great strides made there in recent years, especially with all the Chinese and Korean investors practically buying up your country, but it is losing the Philippine charm it had for so many of my visits. Stories like this are not good for the Philippines in the wake of the positive steps they have made. I am sure that the cost of moving packages overnight in and out of the Philippines, just doubled with this court decision.


User currently offlineblueflyer From United States of America, joined Jan 2006, 3696 posts, RR: 2
Reply 13, posted (8 months 3 weeks 4 days 4 hours ago) and read 10659 times:
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Quoting mtnwest1979 (Reply 1):
If it were me running FedEx Corp, I'd say adios to the Philippines. Probably don't contribute much to overall revenue stream anyway.

You're probably right, but direct contribution isn't the only thing that matters, leaving the Philippines probably has an opportunity cost that is bigger than the lost revenue...

FedEx, UPS and DHL all operate in a lot of countries with very marginal contributions to overall revenue (do you really think DHL makes a lot of money in North Korea), but it's all about being able to offer large corporations a single-vendor solution for their global shipping needs.

When they think "global" I am sure a lot of companies don't have North Korea in mind, but they sure have the Philippines, even if they send only 5 packages a month to Manilla. Think of the existing contracts FedEx will lose and the new ones it will not win because FedEx can't offer a one-stop shopping experience...



I've got $h*t to do
User currently onlinePanHAM From Germany, joined May 2005, 8738 posts, RR: 28
Reply 14, posted (8 months 3 weeks 4 days 4 hours ago) and read 10564 times:

Exactly, FX simply cannot afford to erase the Philippines from their destinations list.

Now, they have a local distribution partner and finding line haul to feed into the hubs of that partner is not that much of a problem if they cannot fly their own metal into the country. Outbound is the bigger problem. However, quick stop gap solutions is what the freight forwarding industry is all about and one part of the integrator FX is freight forwarding.



I'm not fishing for compliments
User currently offlineDTW2HYD From United States of America, joined Jan 2013, 1370 posts, RR: 2
Reply 15, posted (8 months 3 weeks 3 days 22 hours ago) and read 9176 times:

Quoting blueflyer (Reply 13):
FedEx can't offer a one-stop shopping experience...

Not true at all. It is still one-stop shop experience for end user. Even in free market economy like US, DHL decided to shutdown domestic ops. Aviation wings of UPS/FedEx/DHL carry their competitors packages on their cargo planes, they have multi-year contracts. It is still a one-stop experience.


User currently offlineDTWPurserBoy From United States of America, joined Feb 2010, 1255 posts, RR: 6
Reply 16, posted (8 months 3 weeks 3 days 21 hours ago) and read 8342 times:

Quoting airportugal310 (Reply 3):
Just another shining example of how things (don't?) work in the Philippines...

Unfortunately in order to do business in many foreign countries a lot of cash has to change hands. Make them mad and you can find yourself out in the cold. My guess is that a lot of corporations just consider it a cost of doing business.



Qualified on Concorde/B707/B720/B727/B737/B747/B757/B767/B777/DC-8/DC-9/DC-10/A319/A320/A330/MD-88-90
User currently offlineflyhigh@tom From India, joined Sep 2001, 378 posts, RR: 0
Reply 17, posted (8 months 3 weeks 3 days 20 hours ago) and read 7149 times:

Quoting crownvic (Reply 12):
Hey, I love the Philippines and there have been some great strides made there in recent years, especially with all the Chinese and Korean investors practically buying up your country, but it is losing the Philippine charm it had for so many of my visits.

        

Don't get me wrong but the last time i was in Clark sez i was dismayed to see many old green areas cleared and replaced by a lot of Korean owned spas and resorts.   yes kind of losing the philippine charm.

I used to see some regular FEDEX flights into Clark after the wound up in Subic. wonder what will happen now....


User currently offlineandrefranca From Brazil, joined May 2011, 588 posts, RR: 0
Reply 18, posted (8 months 3 weeks 3 days 18 hours ago) and read 6239 times:

Quoting Akiestar (Reply 4):
If I'm not mistaken, courier services in the Philippines is considered a public utility, and so public utilities must be wholly Filipino-owned

Happened pretty much the same thing to DHL in Brazil, American embassy used to mail us the passport with visa via DHL, after Correios (National post service) sued them stating that Brazilian passport is considered a "national letter" and therefore only Correios could mail it, IMAGINE HUNDREDS of travelers stranded because their passports were retained, rioting in front of DHL offices etc... oh Lord, these "third world countries" LMFAO.


Available only in Portuguese: http://g1.globo.com/turismo-e-viagem...-ser-entregues-pelos-correios.html


User currently offlineblueflyer From United States of America, joined Jan 2006, 3696 posts, RR: 2
Reply 19, posted (8 months 3 weeks 3 days 18 hours ago) and read 6108 times:
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Quoting DTW2HYD (Reply 15):
Aviation wings of UPS/FedEx/DHL carry their competitors packages on their cargo planes, they have multi-year contracts.

I wasn't talking about FedEx not being able to use their own fleet to fly shipments in and out. I was reacting to a previous post suggesting that FedEx should cease all activities in The Philippines, basically wipe the country off their map...



I've got $h*t to do
User currently offlineinfiniti329 From United States of America, joined Jul 2012, 469 posts, RR: 0
Reply 20, posted (8 months 3 weeks 3 days 13 hours ago) and read 3366 times:

How does UPS do business in the Philippines?

User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2646 posts, RR: 4
Reply 21, posted (8 months 3 weeks 3 days 13 hours ago) and read 3288 times:
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Quoting infiniti329 (Reply 20):
How does UPS do business in the Philippines?

I don't think it is much different than from FedEx. We have flights from TPE, DXB, HKG, ICN, SIN, NRT, SZX, and KIX to CRK. Plenty of capacity and clearly an international carrier. Should be interesting to see if they go after us as well, or if this is just payback for getting rid of the hub.
Pat



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlineblueflyer From United States of America, joined Jan 2006, 3696 posts, RR: 2
Reply 22, posted (8 months 3 weeks 3 days 12 hours ago) and read 2893 times:
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Quoting jetblueguy22 (Reply 21):
Plenty of capacity and clearly an international carrier.

The issue isn't related to airline operations, but freight forwarding. FedEx is its own forwarder for outbound international shipments, but a court ruled that only domestic corporations can engage in international freight forwarding. FedEx appealed and lost, and its government-issued permit to operate is now invalidated.

What is unclear to me is whether this permit was specifically for its freight forwarding operations, or whether the permit covers all its activities. If it is the former, FedEx can no longer ship out international packages, if it is the latter, FedEx is effectively shut down in the Philippines. Obviously, there's also the question of how quickly the court's decision becomes effective. Hopefully it isn't immediate so FedEx can find a local freight forwarder, maybe even Merit or Ace (the two companies that filed the initial complaint against FedEx).

Going back to UPS, if they use a a local partner for freight forwarding, as I know they do in other countries, this court case shouldn't concern them. If they do their own forwarding, time to quit before their turn in court comes.



I've got $h*t to do
User currently offlinecrownvic From United States of America, joined Oct 2004, 1793 posts, RR: 5
Reply 23, posted (8 months 3 weeks 3 days 7 hours ago) and read 2593 times:

Quoting flyhigh@tom (Reply 17):
Quoting crownvic (Reply 12):
Hey, I love the Philippines and there have been some great strides made there in recent years, especially with all the Chinese and Korean investors practically buying up your country, but it is losing the Philippine charm it had for so many of my visits.



Don't get me wrong but the last time i was in Clark sez i was dismayed to see many old green areas cleared and replaced by a lot of Korean owned spas and resorts. yes kind of losing the philippine charm.

I used to see some regular FEDEX flights into Clark after the wound up in Subic. wonder what will happen now....

I hear you LOUD and CLEAR flyhigh. I was just trying to keep it clean   The government is doing everything it can, to clean up Angeles. The bars that were mostly owned by Americans are rapidly disappearing for several reasons. Many of these guys are Vietnam War era folks, that are either dieing off, getting old or have just had enough and sold out. Many of these bars are now Korean owned and local officials are not happy with the resistance they are getting from the "new generation" owners with their "hand outs". It's just not what it use to be not only for patrons and workers, but the local officials are suffering too! The private sector is now talking about putting a Disneyland in Angeles. If that ever happens, the adult playground turns into a children's playground!


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