UPS boosts Shenzhen operations

PUBLISHED : Thursday, 22 May, 2008, 12:00am
UPDATED : Thursday, 22 May, 2008, 12:00am

United Parcel Service, the world's largest package delivery company, said yesterday it would spend US$180 million to expand its Shenzhen operations fivefold as it relocates its intra-Asia air hub to the mainland city from Clark in the Philippines by 2010.

This is the company's second major investment on the mainland and follows its decision to build an international air hub operation at Shanghai Pudong International Airport in May last year. The carrier has invested about US$600 million in the country over the past six years.

The new hub at Shenzhen Airport, which is scheduled to come on stream by 2010, will cut at least a day off shipment times for manufacturers in Guangdong. The province is a major manufacturing centre in the Pearl River Delta and a major source of shipments for Hong Kong International Airport.

Smaller rival FedEx Express also is establishing an air hub in Guangzhou Baiyun International Airport, which is scheduled to be in operation by the end of the year.

'Given the growth in shipping along southern China, it makes sense to sort and dispatch this volume from a hub closer to our customers,' said Derek Woodward, the president of UPS Asia-Pacific.

The mainland, Hong Kong, South Korea and Taiwan account for more than half of the company's total intra-Asia volume. A sizable volume of these intra-Asia packages was handled in Hong Kong.

The Shenzhen hub, expected to encompass about 89,000 square metres, will include an express customs handling unit, sorting facilities, cargo handling and cargo build-up areas, as well as ramp-handling operations.

It will initially be capable of processing up to 18,000 pieces an hour and can be easily expanded to a capacity of 36,000 pieces an hour.

UPS bought out the shares held by Sinotrans in 2005 for US$100 million, in a bid to take direct control of its 23 joint-venture locations.