Landmark U.S.-China Air Pact to Expand Global Commerce
The bilateral aviation agreement have announced that between the U.S. and China will provide significant opportunity for UPS to grow its business in the region, the company said. UPS Chairman and CEO Mike Eskew applauded the landmark agreement, noting that it “will accelerate the flow of goods into and out of China, providing substantial benefits to American workers, businesses and consumers.”
The new agreement contains a key provision that allows U.S. cargo carriers to establish hubs in China once specific criteria are met. This will allow UPS to provide the centralized transportation of goods not only between the U.S. and China but also within Asia and between China and other parts of the world. As businesses streamline their supply chains, the seamless and efficient movement of goods becomes critical, Eskew noted, adding that the hub provision in this agreement will facilitate that process.
The agreement also includes provisions for a 500 percent increase in cargo capacity between the two countries and underscores the increasing globalization of commerce and benefits of bilateral trade. Additionally, the new U.S.-China agreement permits UPS to connect China and Japan with direct air service, one of the largest and fastest growing trade lanes in the world.
“Our business has experienced explosive growth in China, and customers are asking us to do even more for them in this important region,” said Eskew. “The ability to gain new service rights and increase our presence in China will allow UPS to even better serve the needs of our customers.”
Eskew praised the U.S. team that negotiated the new agreement under the leadership of Secretary of State Colin Powell and Transportation Secretary Norman Mineta. The U.S. negotiators were led by Department of State Director of Aviation Negotiations Marianne Myles and Ed Oppler of the Office of International Aviation at the Department of Transportation. Eskew, who also serves as the Chairman of the U.S. China Business Council, also recognized Civil Aviation Administration of China Minister Yang Yuanyuan and his team of negotiators, led by Director General Wang Ronghua.
UPS, which began direct air service to China in 2001, has experienced double digit growth in the U.S.-China market in each of the last three years and its current flights between China and the U.S. are operating at near capacity. UPS successfully entered the China market in 1988. Last year, UPS took an ownership position in Sinotrans and also became the first foreign carrier to form a partnership with a domestic Chinese air carrier, Yangtze River Express, cutting a day off delivery times.
UPS began its operations in Asia in 1988, and currently serves more than 40 countries and territories in the region. UPS operates air hubs in Taipei, Hong Kong, Singapore and the Philippines and was the first in the industry to offer non-stop service from the United States to China. Any additional rights provided to UPS, including the establishment of a new hub in China, will complement UPS’s existing air network in the region, including the current hubs.
