September 10, 2004

UPS gets tentative go-ahead to expand access to China

Canadian Shipper

The U.S. Department of Transportation (DOT) has tentatively authorized UPS to significantly expand its air operations in China. The decision wil triple UPS’s access to China over the next year, and will provide significant opportunity for UPS to continue growing its business within the region while providing customers with service in all segments of the market – from general freight to express delivery, says the company.

UPS currently flies from the United States to China six times per week. UPS will now get six additional frequencies to Shanghai immediately and six new frequencies to Guangzhou next year. The new frequencies will allow UPS to connect Shanghai to Japan for the first time with non-stop service, and the 2005 frequencies will allow UPS to offer non-stop service from the U.S. to Guangzhou for the first time.

The United States and China negotiated a new bilateral agreement earlier this year that opened the door for expanded aviation rights. UPS formally applied for the new authority in July.

“The new flights will allow UPS to greatly enhance service to this leading global market, to the benefit of customers around the world,” said UPS Chairman and CEO Mike Eskew. “This provides an extraordinary opportunity for strengthening commercial supply chains that support growing international trade between the United States and China and throughout the world.”

UPS first entered the China market in 1988 in partnership with China’s Sinotrans and then began direct air service in 2001. It has experienced double-digit growth in the U.S.-China market over each of the last three years, say officials.

Last year, UPS became a strategic investor in Sinotrans through an initial public stock offering and formed a commercial relationship with a domestic Chinese air carrier — Yangtze River Express — cutting a day off delivery times within the region, says the company.

UPS also began its operations throughout the rest of Asia in 1988 and currently serves more than 40 countries and territories in the region.