UPS adding extra flights to Europe despite euro crisis

PUBLISHED : Wednesday, 19 May, 2010, 12:00am
UPDATED : Wednesday, 19 May, 2010, 12:00am

UPS, the world's largest package-delivery company, said it still believed there would be strong growth in Asia-Europe trade and would increase air services from Hong Kong and Shenzhen to Europe in July, despite the steep depreciation in the euro stemming from the Greek debt crisis.

The company said it would add one weekly flight each from Hong Kong and Shenzhen to Cologne, its European hub, said Daniel Brutto, president of UPS International, at the opening of the Asia-Pacific hub in Shenzhen yesterday.

'The strong European nations such as France and Germany are remaining very strong and England is isolated from the euro crisis,' Brutto said. Greece and Spain, which are at the heart of the euro crisis, are not major trading partners with China and Brutto says he remains positive about the outlook for export volume from Asia to Europe. In the first quarter, the express giant reported a 40 per cent year-on-year growth in export volume from Asia to Europe.

UPS Shenzhen Asia-Pacific Hub, which started a trial run in January, supports 90 weekly flights, mainly connecting Asian destinations with Shenzhen Airport.

The company said intra-Asia trade would continue to be the fastest-growing trade lane, and the Shenzhen hub could benefit from the robust trade growth within the region.

The express giant is considering whether to tap into the domestic express cargo market, now dominated by local players.

'We are studying the feasibility of developing a comprehensive domestic network on the mainland,' said Liu Kai-ming, senior vice president for transportation in Asia-Pacific.

UPS signed an agreement with Shenzhen municipal government and the Shenzhen Airport in May 2008 to move its Asia-Pacific hub to Shenzhen from Clark in the Philippines. The US$180 million facility measures 89,658 square metres, equivalent to 12 football fields, and is more than five times the size of the facility in Clark. The automatic conveyors in the Shenzhen hub can handle 18,000 parcels per hour, compared with 5,000 at Clark.

UPS has also earmarked 45,000 square metres of land at Shenzhen Airport for further expansion.

In addition to express cargo, the company is also looking at the general cargo business at its premises in Shenzhen, an official said. However, the custom screening requirements of general cargo are much more complicated than express cargo, said an industry expert. At present, UPS outsources the handling of general cargo in Shenzhen to International Cargo Centre Shenzhen.