Choose your Country:

	*Franchiseek China*
Home Page \| Franchise Opportunity \| Franchise News \| Business Advice \| Advertise with us

Find a franchise... in


China Franchise News
Franchise Advice
What is Franchising?
Franchise Legal
Franchise Finance
Franchise Development
Business Advice
Franchise Books
Franchise News
Franchise Exhibitions
Search For...
Franchise Opportunity
Franchise Advisor
Franchise Links
Services
Advertise Your Business
Contact Us

Home Page

China Home Page

Published March 2005
.

UPS expands in China

United Parcel Service or UPS, the world s largest express delivery service is expanding aggressively into China, with increased flights, more infrastructure and stronger brand presence. The company is expanding its flights to and from some Chinese cities as a significant step in its China strategy.

The U.S. Department of Transportation earlier this year tentatively authorized UPS to expand its air operations to and from China granting the company three additional frequencies.

UPS currently flies from the US to China 12 times per week to Shanghai and is planning on expanding that weekly number to 18 in April with 6 direct flights to Guangzhou. The US department of transportation decision gives UPS three new frequencies. According to Steve Okun, with UPS Asia Pacific, this is a significant step in the company s China strategy.

UPS entered the China market in 1988 with Chinese joint venture partner Sinotrans which it partly bought out for 100million US dollars in December. When Beijing relaxes foreign ownership regulations under WTO agreements at the end of this year, UPS will wholly own 23 operations covering 200 cities in China. The move means that UPS will go ahead and build its own transportation and logistics facilities in the country. The firm has committed over $600 million in the past few months for investment in China with about $500 million earmarked for building 20 new warehouse and distribution facilities over the next two years.

Being a wholly owned company in China also means UPS will be a much more visual presence as it can now have its distinctive brown logo on delivery vehicles and get its own personnel on the ground.

These developments come upon the heels of a very good year for UPS as its export volume in the mainland market doubled in 2004.

According to Okun, the high growth is fueled by China s high-tech industry.
The aggressive expansion in Asia comes at a time when UPS share of the home market in the US is shrinking. According to JPMorgan, UPS s share of the domestic parcel market fell from 48 to 47 percent last year, while competitor FedEx increased its portion from 29 to 31 percent. Due to competitive pressure, UPS reported a low 1.3 percent on-year rise in fourth-quarter earnings last year from its overall operations, down from 20 percent in the third quarter. With Stagnant growth back home, the company is definitely placing eggs in the China basket. UPS says the year ahead will be a big one.