UPS unveils expansion in services for global shippers

UPS has formed a new business unit that combines a number of recent acquisitions into a global customs brokerage and freight forwarding business.

The new unit, considered a key element of the courier’s long-term growth plan,will include the Fritz Companies, Inc.; seven brokerage and forwarding operations acquired over the past 18 months, plus UPS’s existing freight forwarding interests.

This division, with net revenues exceeding $750 million, combines Fritz’s worldwide reach with additional, concentrated expertise and capabilities inside the US to facilitate North American trade. It will be headed by David Abney, a 27-year UPS veteran and former president of SonicAir, which is now part of UPS Logistics Group.

The new business unit is not expected to have a material impact on UPS’s earnings this year.

UPS agreed in January to acquire the Fritz Companies, a leading freight forwarding, customs brokerage and logistics concern headquartered in San Francisco.

The acquisition of Fritz Companies was structured as a tax-free merger in which Fritz became a separate and wholly owned subsidiary of UPS. Fritz has reight forwarding and customs brokerage operations in 120 countries.

“Long before the purchase of Fritz, UPS developed a strategic plan that called for a dramatic expansion of the company’s ability to serve customers shipping not only packages, but also large items and heavy freight across international borders,” said Abney. “That plan also called for the company to offer full service customs clearance services to shippers of all goods, not just those shipping small packages.”

The acquisitions include:
*H.A. & J.L. Wood, Inc. of Pembina, N.D.
*Border Brokerage Co. of Blaine, Wash.
*Fulfillment Systems International (FSI) of Buffalo, N.Y.
*Trans-Border Customs Service (TCS) of Champlain, N.Y.
*W.Y. Moberly Inc. of Sweetgrass, Mont.
*Miles Group, Inc. of El Paso, Texas
*William F. Joffroy, Inc. of Nogales, Ariz.

The acquisitions were all cash transactions and terms were not disclosed.

In addition to Fritz Companies and the seven acquisitions, the new subsidiary will include an existing freight forwarding operation that includes Unistar USA, Atlas Air of the United Kingdom and UPS Italia.

“Today, the freight forwarding and customs brokerage industries are highly fragmented, both geographically and in the way services are provided to customers,” said Abney. “Moving forward, UPS will be able to offer customers a single point of accountability, which is a powerful value proposition. For example, a customer will be able to manufacture products anywhere in the world and through UPS, move those goods by any mode of transport across any border. When combined with our technology solutions, the financial solutions offered by UPS Capital and supply chain management provided by UPS Logistics Group, UPS has created an unparalleled offering in the
marketplace.”

Atlanta-headquartered UPS is the world’s largest express carrier and largest package delivery company and a leading global provider of specialized transportation and logistics services, serving more than 200 countries and territories. In 2000, UPS generated revenues of $29.8 billion and delivered more than 3.5 billion packages and documents worldwide.