Shenzhen Is New UPS Intra-Asia Air Hub

UPS says it is moving its intra-Asia air hub from the Philippines to Shenzhen to improve customer service by reducing transit times across Asia.

"Shenzhen's strategic location will provide significant advantages, allowing UPS to better serve the growing Asian markets along these rapidly expanding trade lanes," said Dan Brutto, president, UPS International. "For example, we expect a full day's improvement in transit time on almost 200 city pairs once this hub opens. We want to be where our customers need us most," Brutto added. "Since we began flying directly to China in 2001, we have watched this region grow exponentially not only from a small package perspective but also in heavy air freight."

UPS also has added five weekly flights in and out of Nagoya to enhance customer service to Japan's Chubu region, a major industrial manufacturing center. UPS already flies to Tokyo and Osaka. The new flights offer significant new options to Chubu industry to reach the rest of Asia and the United States. UPS will base the new intra-Asia hub at the Shenzhen Airport in southern China, near Hong Kong. The repositioning will slash at least a day off shipment times-in-transit for Asian customers while offering a new level of service to the manufacturing region located just north of Shenzhen. The new cost-efficient hub will be operational in 2010 and represents an estimated investment of US$180 million.

Currently, the markets of China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS's total intra-Asia volume. Of this, a sizeable proportion of Asia package export volume now originates in southeast China and Hong Kong. Since taking direct control of its international express operations inside China in 2005, UPS has made significant investments in the country. In 2007, UPS signed an agreement with the Shanghai Airport Group to establish a UPS International Air Hub at Pudong International Airport in Shanghai. When it opens in November, the Shanghai hub will connect China to the UPS global air network, including U.S. and European destinations. It thus will play a substantially different role than the hub in Shenzhen, which will connect all major Asian points.

The Shenzhen hub, expected to total about 89,000 square meters in size, will include an express customs handling unit, sorting facilities, cargo handling and cargo build-up areas and ramp handling operations. It will be capable initially of processing up to 18,000 pieces per hour — compared to the existing 7,500 pieces per hour in the Philippines — but can be easily expanded to a capacity of 36,000 pieces per hour. It will employ about 400 people.

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