UPS sees fast-growing Asia unaffected by softer U.S.

Packaging delivery company United Parcel Service Inc expects regional growth in Asia will remain robust and be unaffected by a slowing U.S. economy, a senior company official said on Thursday.

UPS, the world’s largest package delivery company, has said growth this peak season would be below the previous four years, reflecting slowing U.S. economic growth, the housing sector slowdown and expectations of low retail sales growth.

But rising trade within the Asia-Pacific region was boosting demand for freight and logistics services in countries including China, India, Vietnam and Thailand, said Ken Torok, president of Asia-Pacific region for UPS.

“Asia-Pacific is our fastest growing region, as the momentum in the services sector and infrastructure development continues,” he said at a conference to launch a strategic alliance with local logistics firm AFL Pvt Ltd.

“And in the region, intra-Asia trade is the fastest growing and leading segment,” he said.

The UPS annual Asia Business Monitor for 2007 showed intra-Asia trade accounted for the most volume growth from small and medium enterprises. Also, trade with the Middle East overtook Europe and the United States for Asian firms.

“Growth within the region is so strong, that what happens in the U.S. market will not have as big an impact on Asia as it did some years ago,” Torok said.

For UPS, business in Asia grew by more than 20 percent in the third quarter, while China and India grew by more than 25 percent, Torok said.

UPS, rival FedEx Corp and DHL Express, the express delivery arm of Deutsche Post, e all increasingly focusing on Asia, and China in particular, where global trade is also growing at a fast clip.

UPS is building a new hub at Shanghai’s international airport, while FedEx has committed to building an air hub in the southern city of Guangzhou.

UPS, which ships more than 15 million packages on average a day, recently launched co-branded stores with Staples Inc in China, and will look for other retail opportunities in the region, Torok said.

UPS lags DHL Express in South Asia, but the alliance with AFL in India will help UPS leapfrog its rivals quickly, Torok said.

India’s international express package market is forecast to grow more than 20 percent a year for the next four years, but its overburdened airports and choked streets pose a challenge to logistics firms including dozens of regional operators.