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UPS opens $125m cargo transit hub in Shanghai

By Lu Haoting (China Daily)
Updated: 2008-12-10 07:55

An employee washes a UPS delivery truck in Shanghai. [China Daily]

UPS yesterday opened an international air hub in Shanghai Pudong International Airport in a bid to grab a bigger share in China's fast-growing express and logistics market.

The hub, with a total investment of $125 million, is the US courier's largest international transit facility in Asia and will connect China to its global air network with direct service to US and European destinations.

The opening of the facility is also expected to speed up Shanghai's growth into a leading international air cargo transport center.

"China is UPS' No 1 international priority and this facility stands as a strong testament to our long-term commitment to China," said Richard Loi, UPS' China head and senior vice-president for Asia Pacific.

While international express and logistics giants are stung by the economic slowdown in the US and Europe, China is playing an increasingly important role to drive their growth.

Atlanta-based UPS reported a 7.4 percent increase in revenue in the third quarter, but its diluted earnings per share dropped 8.6 percent from $1.05 to $0.96 due to the stagnant US economy. Its international and supply chain businesses demonstrated strength despite a challenging global economic environment.

The company saw over 10-percent growth in export business from China and 15-percent growth in the Asia-to-Europe traffic, said Derek Woodward, president of UPS Asia Pacific region.

"When you have a worldwide network, you have to plan for the future. This facility is a long-term investment for UPS for the next 20-30 years," said Daniel Brutto, president of UPS International.

The facility, covering 35,000 sq m, will be able to sort 17,000 pieces of goods per hour by 2012.

Meanwhile UPS is moving its intra-Asia air hub to Shenzhen from its current location in the Philippines. The new hub will be activated in 2010 and involve an estimated investment of $180 million.

DHL and FedEx are also building hubs in China to ensure more efficient air service.

DHL will spend $175 million to build its North Asia express transferring facility in Shanghai, which will be completed in the second half of 2010. FedEx will open its Asia-Pacific hub in Guangzhou in the first half of next year.