The Department of Transportation has approved a request by Federal Express Corp. to begin a small-package express service from Portland, Ore., to Tokyo.
The company will begin flights as soon as agreements for landing slots at Tokyo's Narita Airport and expedited Japanese customs procedures can be reached, said John M. Daurnheim, Federal Express' vice president of operations.
Authority to begin small-package service with Japan was part of a memorandum of understanding signed by the United States and Japan in April 1985. Under that agreement, Delta Airlines was given DOT approval last year to begin passenger service to Asia, using Portland as its gateway.
DOT rejected bids from Orion Air and International Parcel Express, a consortium formed by United Parcel Service and DHL Airways Inc. The department said it favored the Federal Express application because its well-established small-package operation best assures convenience, speed and reliability for customers.
The action could trigger a shakeout in the air freight industry as competitors scramble to catch up, said Kevin Murphy, an analyst at Morgan Stanley. Murphy said the approval could give Federal Express the opportunity to develop a minihub in Tokyo, from which it could operate a package service throughout Japan. The company now operates as a freight forwarder to Japan, using cargo space on other airlines' planes, Murphy said.