UPS plans air hub in China
United Parcel Service, the world’s largest package-delivery company, will spend an initial $20 million to build a new hub in Shanghai to raise air deliveries in China.
The hub, to be located at Shanghai Pudong International Airport, is to start operating in 2008, according to an agreement UPS signed with Shanghai Airport Group on Thursday.
The hub aims to serve a logistics market that grew 14 percent last year, spurring UPS and other overseas companies to add facilities. UPS has invested $600 million in China in the past five years and now ships to more than 330 cities in the country with 4,500 employees.
”We will continue to make appropriate investment in China to meet our customers’ demand,” said Ken Torok, president of UPS Asia Pacific. ”This new international air hub is a critical milestone in our goal to maximize our air network infrastructure in this country.”
UPS in August opened its first two retail centers in mainland China. The company, based in Atlanta flies Boeing MD-11s and 747s to China and plans to add more 747s. The hub will be serviced by eight 747-400s.
The Chinese logistics market grew to 3.84 trillion yuan, or $500 billion, last year, according to the Chinese government. The Chinese domestic air cargo market grew 28 percent to 21.3 billion yuan, the planning agency said March 15.
The new hub is designed to handle 17,000 items an hour by 2012, in a 96,000-square-meter, or one-million-square-foot, facility with plans for ”rapid expansion,” UPS said. The hub could employ more than 1,000 people by 2010.
Deutsche Post’s DHL Global Forwarding said Jan. 26 that it had become the first overseas company to offer domestic airfreight forwarding in China. It will initially offer services in 17 cities, a number that may rise to 70 within five years, it said.
