UPS will base the new intra-Asia hub at the Shenzhen Airport in southern China, near Hong Kong. The relocation will shave at least one day off shipment times-in-transit for Asian customers while offering a new level of service to the manufacturing region located just north of Shenzhen.
The new US$180 million hub will be operational in 2010.
Currently, the markets of China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS's total intra-Asia volume. Of this, a sizeable proportion of Asia package export volumes now originate in southeast China and Hong Kong.
“Given the growth in shipping along the southern rim of China, it now makes more sense to sort and dispatch this volume from a hub closer to our customers,” explained Dan Brutto, president of UPS International. “And in making the switch, because of the growth we're seeing, we intend to build a new sorting hub in Shenzhen with five times the capacity of the existing hub.”
Since taking direct control of its international express operations inside China in 2005, UPS has made significant investments in the country. In 2007, UPS signed an agreement with the Shanghai Airport Group to establish a UPS International Air Hub at Pudong International Airport in Shanghai, which will open in November, connecting China to UPS’s global air network, including US and European destinations. Thus it will play a substantially different role from the air hub in Shenzhen, which will connect all major Asian points.
The new Shenzhen hub will be approximately one million sq.ft, and will include an express customs handling unit, sorting facilities, cargo handling and cargo build-up areas and ramp handling operations. Initially, it will be able to process up to 18,000 pieces per hour - compared to the existing 7,500 pieces per hour in the Philippines - but can be easily expanded to a capacity of 36,000 pieces per hour.
UPS long has pursued a multi-hub strategy to ensure the highest levels of air service in Asia with existing facilities in the Philippines, Taiwan, Hong Kong and Singapore. The Philippines hub in Pampanga at the former Clark Air Force Base will continue to be a strategic location for UPS's multi-hub network in Asia, and UPS also is exploring the placing of alternative operations there.
UPS also has added five weekly flights in and out of Nagoya to enhance customer service to Japan's Chubu region, a major industrial manufacturing centre. These new flights are the result of a US-Japan aviation agreement signed in September 2007, which granted UPS the authority to operate daily flights between the US and Nagoya in addition to its daily services to Tokyo and Osaka.
UPS will operate five weekly MD-11 flights from Anchorage through Nagoya's Central Japan International Airport before heading to Shanghai in China.