Is Our Business

SPECIAL APEC EDITION 2017 TRADE IS OUR BUSINESS

Ho Chi Minh City, Vietnam SPECIAL APEC EDITION 2017 SPECIAL APEC EDITION 2017 BRIGHT FUTURE FOR VIETNAM

David Cunningham, president and CEO, dynamic, well-educated and e-commerce boom firsthand. FedEx recognized FedEx Express, discusses how APEC’s hard-working people are its biggest Just within the last four years, Vietnam’s commitments to economic reform, advantage and also one of the main e-commerce has doubled amazing potential open markets and regional integration reasons the country is moving rapidly in Vietnam and is now a nearly when we are helping fuel growth in Vietnam and up the value chain. $2 billion market. sponsored the APEC member economies. Vietnam is a prime example of Another trend is the move to APEC CEO the benefits of APEC’s vision of reduce administrative costs, or Summit in 2006. In 2006, Vietnam hosted its first economic reform, open markets “red tape,” associated with trade. DAVID CUNNINGHAM We have been APEC CEO Summit. The theme: and regional integration. We’ve even Administrative rules written for proudly serving Vietnam since 1994, “Towards a Dynamic Community seen the results at FedEx. Last year, 40-foot containers can become a real and we are excited to return to for Sustainable Development and for instance, over 87 percent of barrier to trade when applied to a Vietnam as a Platinum sponsor of the Prosperity.” Vietnam quickly put FedEx shipments from Vietnam single package crossing a border. 2017 APEC CEO Summit. FedEx these words into action. were exported to APEC member Small businesses don’t have the believes strongly in this year’s APEC In the 10 years following that economies, and 90 percent of our resources to navigate complex theme, “Creating New Dynamism, summit, Vietnam’s exports have shipments to Vietnam were imported border rules. We need to find new Fostering a Shared Future,” as we grown an astounding 500 percent, from APEC economies. ways to simplify trade for these remain committed to contributing to and its per capita GDP increased 175 FedEx has been a strong small businesses — our customers. Vietnam’s bright future and to the percent. Last year the economy supporter of APEC for many years So we are glad that Vietnam has larger APEC vision of greater attracted nearly $16 billion in foreign primarily because of its dedicated highlighted e-commerce and small economic integration and prosperity direct investment, helping turn focus on the trends shaping the and medium-sized enterprises throughout the Asia Pacific region. Vietnam into the 24th-largest future of the global economy. (SMEs) during its APEC year. This Congratulations to the people export economy in the world. One such trend, e-commerce, has focus will no doubt help Vietnam and of Vietnam for hosting APEC this As good as the last decade was created enormous opportunities for other APEC economies compete in year. I hope you enjoy the stories for Vietnam, the future is even small businesses and has enabled the that rapidly expanding marketplace. and perspectives in the pages brighter. Vietnam has one of the rise of a new “micro-multinational” Perhaps more importantly, that follow. youngest populations in the world, that can sell goods to the world with e-commerce can help APEC achieve The Cau Rong, or Dragon Bridge, crosses the with more than half of its citizens only a website and a FedEx account. its goal of more inclusive trade and Learn more at trade.fedex.com and River Hàn at Da Nang, Vietnam. Designed in the under the age of 30. The country’s Vietnam has experienced the economic growth throughout the region. follow us on Twitter at @FedExPolicy. shape of a dragon, the bridge breathes fire and b water every Saturday and Sunday evening. 1 SPECIAL APEC EDITION 2017 SPECIAL APEC EDITION 2017 IN BRIEF

New Facility Takes Flight in Shanghai By the Numbers: Asia Pacific E-Commerce Flying Lab

Shanghai has set its cargo and Cargo Hub set to open in FedEx Express and Boeing are technologies that reduce material sights high: The city’s Pudong November 2017 more than triples teaming up to test advanced flight waste. International Airport, already the the capacity of our old facility deck systems and fuel-saving “FedEx is committed to develop world’s third-busiest airport by — allowing us to process up to technology starting in early 2018. ing and implementing innovative cargo traffic, is on track to rise 36,000 documents and parcels 80% 94% The three-month program will solutions that connect the world to the top of the list by the end per hour. With the economy convert a 777 FedEx aircraft into responsibly and resourcefully,” says of the decade — and as the airport of Shanghai and China continuing a flying aeronautics laboratory. David Cunningham, president and becomes an increasingly import- to boom, it ensures we’re The goal of the 2018 eco- CEO, FedEx Express. “We’re proud ant player in logistics and trade, providing our global customers HONG KONG CHINA Demonstrator program will be to work with Boeing and use our Helping Businesses Move Freight Forward FedEx is growing with it. Our new the connectivity they need to 80% of small and medium-sized 94% of SMEs are generating to test emerging technologies, 777 Freighter to play a key role in $100 million International Express help their businesses grow. enterprises (SMEs) are engaged revenue through m-commerce including a new, fuel-saving bringing future benefits to the in e-commerce This summer’s openings of FedEx solutions and supply chain visibility compact thrust reverser developed aviation industry.” Trade Networks offices in Vietnam to help businesses of all sizes move by Boeing; flight deck improvements FedEx has a companywide and Japan bring international forward,” says Richard W. Smith, that can boost efficient operations environmental objective to freight-forwarding services to president and CEO, FedEx Trade in and out of busy airports; and reduce aircraft emissions intensity customers in both countries, helping Networks. Both openings represent prototype airplane parts using 30 percent from a 2005 baseline them optimize their supply chains strategic investments in markets 77% 75% cutting-edge manufacturing by 2020. for faster speed to market with lower with growth potential. In Vietnam, costs. Services include expanded the freight-forwarding market is regional access to international direct expected to grow to $1.4 billion by distribution, customized multi-modal 2019, and in Japan, it’s expected to solutions, and trade and customs grow to more than $6 billion by 2019. SOUTH KOREA SINGAPORE expertise. “We believe in making The new offices — in Ho Chi Minh 77% of SMEs are generating revenue 75% of SMEs are generating through e-commerce revenue from e-commerce the complexities of global shipping City and Tokyo — bring the total simple, and we strive to provide of FedEx Trade Networks offices in Source: “Global Trade in the Digital Economy: Opportunities for Small Businesses,” a commissioned research unparalleled freight-forwarding 16 APEC member economies to 106. study conducted by Harris Interactive on behalf of FedEx, September 2016.

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Over half of the TOSY staff in AN ECONOMY BUILT ON TRADE Vietnam works in R&D, many as Thousands of products like robotic hardware and software engineers. toys and sophisticated medical The team’s tech savvy is fueling devices — often from small and what will be the company’s fifth toy, medium-sized enterprises (SMEs) — a sparring robot due out at the end have helped Vietnam steadily move of 2017. It’s also created a huge and up the trade-partner list for many growing B2C demand, which TOSY countries, including the U.S. Vietnam’s Motorbikes are the most popular is addressing by launching its first second-largest trading partner is the and convenient mode of transportation e-commerce channel, also at the U.S., totaling over $50 billion in TOSY’s spinning toys include the TOOP in Hanoi, Vietnam. end of this year. two-way trade. Top Vietnamese tops with LED lights (above) and the “FedEx has played a great role exports include electronics, apparel, AFO circular boomerang (below). in helping bring our products to a shoes, coffee and seafood. wider audience across the world,” Ten years ago, Vietnam joined the Pham says. It’s a global consumer World Trade Organization, and since base that has helped create demand then, exports have continued to grow Vietnam on the Move for the high-tech toys popular with rapidly. Global trade now represents adults and children alike. “Adults use over 80 percent of Vietnam’s GDP, Global trade has transformed Vietnam since FedEx started operations there in 1994. their kids as an excuse,” Pham and Vietnam’s growth per capita has laughs, “but adults like the toys too.” averaged 6 percent per year over the Here’s a quick look at the impact, from logistics to little robots. last decade.

HANOI’S TOSY ROBOTICS has only says Trang Pham, international the ceiling or hang on a wall. four products to its name — but public relations manager. Take the With more than 1 million AFO those four products have sold top-selling AFO, which the company units sold and patents in several millions, broken world records and calls a modern circular boomerang. countries, including the U.S., put the company on the high-tech “You see flying toys everywhere, the company has added TOOP map. The popularity of TOSY’s toys but what makes ours different is, (a mechanical spinning top that 500% 175% #24 — designed and manufactured in after you launch it into the air, it set a Guinness World Record robot that detects beats and shows Increase in Vietnam’s Increase in Vietnam’s Vietnam ranking Vietnam and sold in 55 countries — flies really far and high, and comes with a spin that lasted 24 hours, off 56 dance moves). exports 2005–2015 GDP per capita in world export is because “they’re different from back to exactly where you are,” 35 minutes and 15 seconds) and Ingenuity comes from an Source: World Bank 2006–2016 economies — 2016 anything else in the marketplace,” Pham says. It can also spin on DiscoRobo (an innovative little innovative spirit at the company. Source: World Bank Source: Atlas/MIT

4 5 SPECIAL APEC EDITION 2017 SPECIAL APEC EDITION 2017 Small Business, Big Purpose The FedEx Small Business Grant Contest helps small businesses go global. Here are six top finalists from this year’s contest.

IN THE MIDST OF GLOBAL INNOVATING THE FUTURE GROWING PRINT The first school funded by FedEx FEDEX IN VIETNAM slow — it’s not like it is now!” Cities TRANSFORMATION, it’s often the OF HEALTHCARE IN THE DIGITAL AGE opened in Chu Lai in 2000 (above, FedEx has served Vietnam since are more crowded and energetic, smallest businesses that have the left). Loading an MD11 in Ho Chi eNano Health, Hong Kong ZHENGZHOU YUHE PRINT diplomatic relations with the U.S. she says, as global connections Minh City (above, right). most lasting impact on their This company’s saliva-based tests & DESIGN CO., LTD, China were re-established in 1994, and have grown. customers and communities. The are a non-invasive, affordable Recognizing a gap in quick-turn we were the first international One of the qualities Cong values finalists and winners of this year’s alternative to blood tests. Solutions printing for B2B needs, Zhengzhou express transportation company to most is how those connections FedEx Small Business Grant Contest include a first-of-its-kind rapid Yuhe prints products using operate our own flights into and out have benefited Vietnam beyond provinces of Nam Dinh and Yen Bai. in China, Hong Kong and Singapore glucose monitor that can check environmentally friendly raw of Vietnam. FedEx now has over business numbers, which includes Last year, the Vietnam Children’s have a shared characteristic: an levels of various biomarkers. materials and suppliers. 160 vehicles and nearly 500 team a long-term commitment by FedEx Fund and FedEx inaugurated a entrepreneurial spirit that drives them members in the country. Our first to invest in communities where we second primary school in Quang to grow their global footprint. PROVIDING LIFE- team member in the country still do business. In cooperation with Nam province — the Nguyen CHANGING LIGHT works for us today. In Ho Chi Minh the Vietnam Children’s Fund, more Thi Minh Khai school. Located in WEAVING AN Nokero, Ltd., Hong Kong City, Hang Cong, now a senior than 2,000 children are currently a flood-prone district, it also EMPOWERED FUTURE Across the globe, approximately CREATING POSITIVE NOISE human relations specialist, has attending schools in the country serves as a disaster relief center 1.3 billion people rely on burning Ana by Karma, Ltd., E-TracX DJ Skool, Singapore had a front-row seat to the that are funded by FedEx. It started when monsoon rains hit the area. Hong Kong kerosene as their light source every Equal parts computer science and country’s transformation. “Back 18 years ago in Chu Lai. “I handled “I appreciate what the company From June 2014 through the end night — an activity that’s expensive music theory — that’s the unique then after the war, Vietnam was the logistics activities for the has brought to our people, especially of December 2015, this company and pollutes the air. Since 2010, amalgam of skills necessary to closed off,” she recalls. “When the grand-opening ceremony of the the way it provides support,” Cong enabled its team of scarf weavers in Nokero (no kerosene) has been become a professional DJ. E-TracX embargo was lifted and we joined first school we built,” Cong says. says. “It’s for the children and young Bhutan to collectively earn the providing an environmentally DJ Skool has helped thousands of Farmers in Vietnam the market, Vietnam was very Since then, she’s helped open people who will be the key forces equivalent of 34 years’ worth of income friendly solar alternative to people young artists develop this skill set can monitor growing simple and the economy was very schools funded by FedEx in the in the country’s development.” of a low-income Bhutanese family. in 120 countries. and build their DJ careers. conditions via 6 smartphone. 7 SPECIAL APEC EDITION 2017

to her embrace of digital supply A VALUABLE LESSON chain management, the speed with Time is also crucial when Hyperbola High-Tech which she’s able to get to market is is shipping samples to global trade another important differentiator. shows, which is where Wang meets potential customers face to face — FROM START TO and where she lived an entre FINISH IN A FLASH preneur’s worst nightmare when Textiles Bringing the designers’ ideas a previous delivery company lost to life means collaborating closely a shipment in a snowstorm. Instead Hyperbola fabrics are designed for pursuits from with subcontractors who have of meeting prospective clients in hot yoga to high-altitude trekking to just hanging out. the expertise and leading-edge Hyperbola’s custom-designed exhibit equipment to quickly mill the space surrounded by hundreds of products to their exact specifications. samples, she met them in a totally MOST FABRICS AREN’T MADE in fabrics such as soft “function FedEx automation makes it seamless empty booth. “With FedEx, we never to withstand the worst possible wool” that’s both windproof and for Hyperbola to coordinate global have these kinds of problems. If weather and activity conditions, waterproof. “The products in the shipping of fabric samples to clients issues do arise, we can count on Hyperbola Founder and CEO Tina much less perform perfectly in medical, fashion and outdoor fields and then shipping of finished fabrics FedEx to help us to overcome them.” Wang, along with her team, designs them. But that’s what makes are all different, but they all need directly to garment manufacturers. Hyperbola’s unique combination textiles that are waterproof, windproof Hyperbola special. Its name a textiles,” Wang says. A few clicks to set up and manage of high fashion and high performance and light-reflecting. combination of English words New fabrics are born during the shipping process saves time has won it customers all over the meaning “super” and “fiber,” brainstorming sessions with a and enables the team to focus on world, but Wang has chosen to keep 16-year-old Hyperbola creates team of 30 at the company’s loft innovative design, rather than the business in Taipei, where fabric innovative performance fabrics in Neihu, the tech hub in Taipei worrying about logistics. manufacturers offer the agility and for some of the world’s best- where Wang says she’s been able Speed is essential, Wang says, innovation her business requires. known brands and is an upstart in to “find the talented people who because retailers’ design teams The company has designed textiles the textile marketplace in Chinese have an international view” she will often start choosing fabrics as that are waterproof, windproof and Taipei, where its major competitors needs to build her innovative team. soon as their vendor samples begin even reflective of light. “We want have all been in business for more “Some of our team members have to arrive. “Time is crucial for our to promote functional textiles across than a century. Founder and CEO a background in textiles, some with clients, so they can be competitive an international platform,” Wang Tina Wang’s vision is unusual in its PhDs in that field,” she says. in the market,” Wang says. “FedEx says. Imagine traveling the world Most of Hyperbola’s team members combination of keen design sense Wang’s relentless commitment to has really helped us in this way.” and never even caring if your suit have deep expertise in textiles — so with functional newness, resulting R&D sets Hyperbola apart. Thanks gets wet. much so that R&D has become one 8 of the company’s top differentiators. 9 SPECIAL APEC EDITION 2017 SPECIAL APEC EDITION 2017

refuse directly from apartments and takes well over an hour (with no office buildings into an underground subway). That makes for a tough Designing One of the system of pipes (eliminating trash commute, which explains why Songdo cans and garbage trucks), where it’s has only 70,000 or so daily commuters, separated to be buried, recycled or versus the 300,000 commuters that burned for fuel. planners envisioned. The same goes World’s Smartest Cities From the start, Songdo was built for residents: The 100,000 figure falls with sustainability in mind. Some short of the goal of 300,000. Songdo, South Korea, is packed with ideas for how cities around the world 22 million square feet of its buildings While Samsung, Daewoo and other can boost sustainability, efficiency, quality of life and trade. are LEED-certified (the certification South Korean companies have bases in by the U.S. Green Building Council), Songdo, the city has yet to attract major and Songdo is now home to the development from foreign comp a nies. THIS SUMMER’S OPENING OF CITY IN A SNAPSHOT Free Economic Zone (IFEZ) near Global Green Growth Institute, a One exception is Cisco, which opened “MONSTER VR” — South Korea’s Songdo — a name that translates Seoul’s Incheon International United Nations organization. More a Global Innovation Lab here. large virtual reality theme park, to “Pine Island,” inspired by the Airport, Songdo was designed than 20 miles of paths accommodate Songdo’s planners say the city still where visitors experience car area’s trees — wasn’t much more to serve as a hub for international bicyclists, walkers and joggers. holds tremendous potential. Office racing, bobsledding and traveling than marshland at the turn of the business. Recently, FedEx But make no mistake, Songdo buildings are starting to fill up. And the to outer space via virtual reality — last century. Built on 1,500 acres announced plans to construct a new was built to be massive. Develop planned development of the National was the latest event to make of reclaimed land jutting into the cargo terminal facility at Incheon ment so far includes 80,000 Museum of World Writing — which headlines in Songdo, about 40 miles Yellow Sea, it counts proximity International Airport with advanced apartments, 50 million square feet includes a library and archive — is set outside of Seoul. to nature as a big appeal. But logistics capable of sorting up of office space and 10 million square to join the futuristic Tri-Bowl exhibition Considered by many urban manmade features incorporate to 18,000 packages per hour. feet of retail space. More than and performing arts space, boosting designers as a leading example nature, as well: The new 101-acre Technology factors into nearly 100,000 residents call the city home. Songdo’s cultural value. of a smart city, Songdo has been Central Park sits at the center every aspect of living and is mostly More than anything, though, Songdo rising rapidly since building began of the development. invisible. Sensors, for example, PROMISE AND POTENTIAL serves as a living lab, teaching the world in 2005. As significant phases The city’s focus on trade and optimize the flow of traffic and aid in Not surprisingly, Songdo has its what’s possible for a connected city. of construction near completion innovation, however, is what is security. Building systems (lighting, critics. Although the city sits a mere Major universities from around the world over the next couple of years, attracting the most attention. heating and air conditioning, 15 minutes from Seoul’s Incheon have opened satellite campuses here. people are taking a closer look South Korea’s tallest building — water) also link to sensors, International Airport Their students, not to mention other at what’s worked, what hasn’t the stunningly sleek, 65-story maximizing efficiency. (accessible by car and observers, are taking note — and, and what it means for cities Northeast Asia Trade Tower — Even the trash systems subway), getting from more than likely, taking the city’s The connected city of Songdo, near Seoul’s around the world. was built here. Part of the Incheon are high-tech, sucking Seoul to Songdo itself ideas to a city near you. Incheon International Airport, serves as a hub for international business. 10 11 SPECIAL APEC EDITION 2017 SPECIAL APEC EDITION 2017 CONNECTING THE GLOBAL MARKETPLACE

Karen Reddington, regional president, just as in all APEC economies and DEREGULATION AND accelerate the FedEx Express Asia Pacific, discusses around the world, the global FedEx POLICY SUPPORT development of the importance of APEC efforts in team is dedicated to harnessing To foster innovation and unleash infrastructure boosting Asia Pacific economies. the full potential of global trade. the true potential of global trade, — roads, airports, We do that by promoting innovation, economies must be prepared to seaports — that FedEx is pleased to continue its seeking policies that are pro-business create a policy and regulatory is really the support of APEC in 2017, and we and supporting infrastructure environment that facilitates trade and backbone of an congratulate Vietnam on a successful development. investment. APEC has an important KAREN REDDINGTON efficient global host year. We support APEC because role to play here. We congratulate trading system. trade is our business, and we operate INNOVATION APEC leaders on the ratification of Without a robust infrastructure across every APEC economy with Small and medium-sized enterprises the Trade Facilitation Agreement in network, exporters lose their global 26,000 FedEx team members in (SMEs) make up on average 95 February this year and welcome audience and consumers cannot the Asia Pacific region alone. APEC percent of firms in most countries. their focus on supply chains and access imports from around the world. economies are home to nearly Those SMEs are innovation drivers: connectivity. With the growth we are I am delighted to attend this year’s 3 billion people, who conduct half of They create new products, new seeing in cross-border e-commerce APEC CEO Summit. FedEx Express the world’s trade, and our commitment economic opportunities and new shipments, these initiatives — shares APEC’s vision to connect member to those people, the entire region and social paradigms. They boost especially streamlining customs economies for the benefit of all. We to the mission of APEC has never participation in the global economy, procedures and tax rules — are applaud APEC leaders for promoting been stronger. including by women. They can now more important than ever. pro-business environments that spur We are also happy to be a part account for the majority of exports innovation in their own economies of Vietnam’s growth story. Our FedEx from an economy, especially with the INFRASTRUCTURE and for supporting trade policies that team members here are all part of emergence of global e-commerce. At FedEx, we operate a global leverage physical infrastructure to Vietnam’s vibrant economy and help We recognize the increasing network of people and vehicles that streamline cross-border trade. When to create its bright future. They importance of SMEs in delivering connects 99 percent of the world’s those efforts are aligned across all enable exports from Vietnam’s strong innovation and economic prosperity, GDP. We rely on the physical APEC economies, we believe there is manufacturing sector and facilitate and we work hard to help them infrastructure that connects no limit to realizing this year’s theme Hong Kong bustles, even imports driven by burgeoning expand into global markets. economies to each other. That is of creating a new dynamism and a during a rain. For more on e-commerce activity. In Vietnam, why we support APEC’s efforts to shared future in Asia Pacific. the city’s e-commerce 12 economy, see page 3. 13 SPECIAL APEC EDITION 2017 The world is your customer

At FedEx, we help businesses throughout Asia expand their reach and connect to global markets. Because trade is our business, we help you make the most of yours.