Air Express Industry Plays Increasingly Important Role in ASEAN Economic Growth
US-ASEAN Business Council Study Shows Integrated Express Industry
Supports Competitiveness, Efficiency, and Trade Expansion(Washington, DC, and Bangkok, Thailand). The air
express Industry is making an increasingly important contribution to economic growth and
development in Southeast Asia, according to a study released today by the US-ASEAN
Business Council. Entitled Delivering Business into the 21st Century: The Integrated
Express Industry in the ASEAN Region, the study notes that the value of U.S.-ASEAN air
trade has grown at an average annual rate of 14% over the last decade, and is expected to
continue to expand rapidly, increasing the demand for integrated express services. The
study was undertaken with the cooperation of Federal Express, United Parcel Service, DHL,
and other express carriers in the ASEAN region.
"This study underscores the fact that the integrated express industry contributes
substantially to employment, growth, competitiveness, and efficiency in the countries in
which it operates." said Jim Kelly, Chairman of the US-ASEAN Business Council and
Chairman and CEO of United Parcel Service. "Our industry has a long history in ASEAN
and is committed to this important market."
"We strongly endorse the conclusions of this study,
which brings out the central role played by the air express industry in the ASEAN region,
particularly for the development of high-tech production requiring fast, reliable,
just-in-time express and logistics support," noted David Cunningham, President of
FedEx, Asia Pacific. "ASEAN economies are rapidly moving into the e-commerce era and
will
increasingly depend upon first class air express service for their manufacturers and
exporters."
Among the report's key findings:
In 1999, the integrated air express industry
generated approximately US$50 billion in economic activity, which supports an estimated
350,000 jobs in ASEAN. This represents approximately 6.5 per cent of the cumulative GDP of
ASEAN member-economies.
From 1990 - 99, the value of two-way air trade
between the U.S. and ASEAN increased from US$20.3 billion to US$67.6 billion, an average
annual growth of more than 14%.
As more sophisticated, high-tech products are
manufactured, assembled, and distributed in the ASEAN region, the need for integrated
express service will grow.
The industry further contributes to the
competitiveness of local economies by reducing lead times for ordering products, improving
customer service, providing real-time supply/demand data for more accurate forecasting and
planning, and allowing for more efficient inventory and supply chain management.
To enjoy the full benefits of integrated
express services, governments need to address restrictive civil aviation agreements,
cumbersome customs clearance procedures, and restrictions on investment in ground
transportation operations.
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The study was announced today following a meeting
between Prime Minister Chuan Leekpai and the members of the Board of Directors of the
US-ASEAN Business Council.
According to the study, in 1999, the integrated air express industry generated
approximately US$50 billion in import and export related economic activity, which supports
an estimated 350,000 jobs in ASEAN. This represents approximately 6.5 per cent of the
cumulative GDP of ASEAN member-economies.
By reducing lead times for ordering and delivering products and providing real-time supply
and demand information, an integrated express industry allows businesses to plan and
forecast more accurately, maintain lower levels of inventory, and better manage their
supply chain. This in turn leads to massive cost savings and efficiency gains.
Although the potential for growth in integrated express services in ASEAN is significant,
the industry will be unable to reach its full potential - and generate the maximum
benefits for national economies -- unless governments take action to overcome a variety of
barriers. Chief among these challenges are restrictive civil aviation agreements,
cumbersome customs clearance procedures, and restrictions on investment in ground
transportation operations.
For integrated express carriers to build an efficient network, ASEAN countries need to
embrace a fully liberalized, open-skies civil aviation environment. This would permit a
truly intra-ASEAN network that could connect with the rest of the world.
Under the ASEAN Customs Agreement and Customs Vision 2020, the ASEAN countries are
harmonizing and streamlining customs rules and regulations, adopting a common valuation
methodology, and harmonizing customs nomenclature. "ASEAN already has in place an
excellent framework within which it is taking steps to ensure that customs services
facilitate trade and business while still being able to carry out their important
responsibility of protecting their countries from contraband and smuggling." Kelly
added. "Through the US-ASEAN Business Council, the Conference of Asia Pacific Express
Carriers, and other forums, we are committed to working with ASEAN customs services and
administrations to realize the goals of the Customs Agreement and Customs Vision."
"Consistent and transparent application of policies is central to ASEAN's continued
success in attracting foreign direct investment." said Ernest Z. Bower, President of
the US-ASEAN Business Council. "As ASEAN implements tariff reductions under AFTA,
plant location and other investment decisions will be made increasingly on the basis of
factors that affect the cost and efficiency of manufacturing; among the most important of
these factors is logistics, and customs clearance is a key determinant of transportation
efficiency. Any country that does not benefit from a world-class customs clearance agency
risks falling behind in the competition for foreign investments and economic growth."
US-ASEAN trade has increased sharply over the past decade. U.S. exports to the ten ASEAN
countries collectively totaled US$40.07 billion in 1999, while imports were US$77.8
billion. U.S. investment in ASEAN has also seen sharp growth; even during the regional
financial crisis, U.S. investment continued to increase, and at the end of last year,
measured US$52 billion, compared with US$38.8 billion at the end of 1997.
Delivering Business into the 21st Century: The Integrated Express Industry in the ASEAN
Region was prepared for the US-ASEAN Business Council by GKMG Consulting, a unit of the
Hagler-Bailly Company, with the cooperation of UPS, Federal Express, and DHL as well
express service shippers in the ASEAN region. Copies are available from the US-ASEAN
Business Council upon request, or by visiting the US-ASEAN Business Council Web site at
www.us-asean.org/express_industry/.
Contacts:
John Goyer, US-ASEAN Business Council, tel (202) 289-1911, fax (202) 289-0519, e-mail: jgoyer@usasean.org
Kirsten Envall, United Parcel Service (Washington, DC) (202) 675-3362, fax (202) 675-4230,
e-mail: nat1kxe@ups.com
Tan Sock Hwee, United Parcel Service Bangkok/Singapore tel: (662) 331-9384, fax: (662)
332-5171
email: uracha@124comm.com or e-mail: sockhweetan@ups.com
US-ASEAN Business Council is a private, non-profit membership organization
working to promote increased trade and investment between the U.S. and the member
countries of the Association of Southeast Asian Nations (ASEAN). For information on the
US-ASEAN Business Council or general information on the ASEAN region, please contact John
Goyer at jgoyer@usasean.org or visit the Council's
Web site at www.us-asean.org.
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