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LAXintl
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FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 10:16 pm

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

=
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mtnwest1979
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 10:42 pm

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!"
 
AA7295
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 11:00 pm

Really great advertisement for foreign businesses looking to invest in this developing economy.
 
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airportugal310
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 11:09 pm

Just another shining example of how things (don't?) work in the Philippines...
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Akiestar
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 11:12 pm

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.
 
ikramerica
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 11:20 pm

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?
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LAXintl
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RE: FedEx Has License Revoked By Philippine Court

Thu Jul 25, 2013 11:42 pm

FX has been gone from the Subic hub for like 5-years.
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zeke
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 1:00 am

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".
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ltbewr
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 2:05 am

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).
 
dtw2hyd
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 2:07 am

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.
 
Akiestar
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 2:14 am

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.
 
mtnwest1979
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 3:02 am

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!"
 
crownvic
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 3:42 am

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.
 
blueflyer
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 6:28 am

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...
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PanHAM
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 6:46 am

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.
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dtw2hyd
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 12:03 pm

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.
 
DTWPurserBoy
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 1:17 pm

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.
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flyhigh@tom
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 2:44 pm

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....
 
andrefranca
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 4:00 pm

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.


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blueflyer
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 4:09 pm

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...
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INFINITI329
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 9:18 pm

How does UPS do business in the Philippines?
 
jetblueguy22
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RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 9:28 pm

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.
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blueflyer
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Joined: Tue Jan 31, 2006 4:17 am

RE: FedEx Has License Revoked By Philippine Court

Fri Jul 26, 2013 10:34 pm

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.
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crownvic
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RE: FedEx Has License Revoked By Philippine Court

Sat Jul 27, 2013 3:31 am

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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