UPS moves intra-Asia hub to Shenzhen

China - UPS has picked Shenzhen in China's Pearl River Delta as the ideal location to build an intra-Asia hub from the current one in the Philippines to cut transit times across the Asia region.

The new intra-Asia hub will be based at the Shenzhen Airport in southern China, near Hong Kong and is expected to be completed by 2010. By re-locating the hub at Shenzhen, it would enable shipments to shave at least a day off time-in-transit and reduce operational costs.

The new 89,000sqm hub will be furnished with an express customs handling unit and cargo build-up area. The hub will initially be capable of processing up to 18,000 pieces per hour and is expected to increase to 36,000 pieces per hour.

UPS has made investments in China since its entry in 2005 when it took direct control of its international express operations. Currently, UPS is developing a UPS International Air Hub at Pudong International Airport in Shanghai. When it operates in November, the Shanghai hub will link China to the UPS global air network, linking the country with all major Asian points.

Derek Woodward, president of UPS Asia Pacific said that UPS would be able to serve the Asian market along the rapidly expanding trade lanes due to the time-in-transit and cost advantages. He said: "For example, we expect a full day's improvement in transit time on almost 200 city pairs once this hub opens."

"Given the growth in shipping along southern China, it makes sense to sort and dispatch this volume from a hub closer to our customers," stated Woodward. "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."

The current hub at Clark Air Force base in Pampanga, Philippines, will continue to be a strategic location for UPS's network in Asia while providing the gateway for import and export for the country. So far, UPS is exploring placing alternative operations there.

Currently, more than half of UPS's total intra-Asia volume is accounted by the China, Hong Kong, Japan, Korea and Taiwan markets. The hub represents an estimated investment of US$180 million.