SHANGHAI: United Parcel Service Inc, the world's largest package delivery provider, will build an international air hub in the city as the US freight company accelerates its expansion drive in China.

Ken Torok (left, first row), president of UPS Asia-Pacific, and Wu Nianzu (right, first row), chairman and president of Shanghai Airport Authority, at a signing ceremony for the UPS-SAA International Air Hub in Shanghai April 12, 2007. [China Daily]

The hub, to be located in Shanghai Pudong International Airport and scheduled to open next year, will cover 96,000 square meters and will be able to sort 17,000 pieces of goods an hour by 2012, according to an agreement UPS signed yesterday with the Shanghai Airport Authority.

The new hub, with an initial investment of $20 million, "is a critical milestone in our goal to maximize our air network infrastructure in China", said Ken Torok, president of UPS Asia-Pacific. "It will connect China to international markets faster and more efficiently."

The hub will bring to four the number of UPS's regional air hubs in the Asia-Pacific, the president said.

The express delivery giant now has three hubs in the region in Hong Kong, Taipei and the Philippines.

The new project is the latest move by UPS to speed up its pace of expansion in China, where the logistics market is expected to grow rapidly.

The Atlanta-based company launched direct flights between China and Europe and added three flights between Shanghai and the US earlier this month.

It took direct control of its operations in China in 2005 after buying out its Chinese partner Sinotrans Air Transportation Co's 50 percent stake in a joint venture.

UPS, which has poured about $600 million into China over the past five years, "is committed to China and will continue to invest in China to enhance our transportation and distribution services", Torok said.

Leading international freight forwarders FedEx, TNT and DHL have all stepped up their expansion in China.

Germany's DHL has spent $315 million on express delivery and logistics infrastructure since it entered the country in 1984.

China's logistics market, which is expected to grow 30 percent annually over the next three years according to consultancy Jones Lang LaSalle, stood at 3.84 trillion yuan last year, said the National Development and Reform Commission.

(China Daily 04/13/2007 page14)

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