United Parcel Service (UPS) will spend at least $10 billion to expand its fleet of Boeing freighter aircraft and increase its carrying capacity in the Asian market as well as on other international routes.
The Atlanta-based express parcel giant yesterday agreed to buy eight B747-400 freighters from Boeing. The first aircraft is scheduled for delivery in June 2007, in time for the launch of the company's new China hub at Shanghai Pudong International Airport later that year.
US-based UPS spokesman Mark Giuffre said the timing of the delivery was not a coincidence but that the new fleet would not be exclusively based in Shanghai.
'As our volumes continue to grow in Asia, especially China, this deal will allow us to upsize to larger planes and shift the MD-11s we use there to other routes,' Mr Giuffre said. 'It's almost like the perfect plane at the perfect time.'
The deal was the largest single order for the B747-400F model, which Boeing lists at US$209.5 million per unit. Discounts of up to 30 per cent are common, especially with record orders.
UPS' international package revenue rose 22.7 per cent in the second quarter to US$2 billion, fuelled by a boom in Asia, where export volumes grew 39.5 per cent.
In China, UPS said exports doubled year on year in the quarter.