UPS and SF Express partner for China's booming delivery needs

Two delivery giants, US-based UPS and China-based SF Holding, the parent company of SF Express, have announced that they will establish a joint venture to develop international delivery services, initially from China to the US.

Details of the agreement are still subject to regulatory approval, but the parties said they will leverage their complementary networks, service portfolios, technologies and logistics expertise, to provide customers with greater coverage, additional routing options, increased capacity, and more choice in transit times and service options. The joint venture will initially focus on supporting these highly competitive joint service offerings on the China-to-US lane, with planned expansion to markets in the rest of the world.

SF is currently one of the market leaders in express delivery in China, with 13,000 service points in the country, and high brand recognition in the Chinese small package market.

The Chinese company has a market capitalisation of US$29 billion. Already present in the Singapore and Malaysia market, SF has recently opened service centres in Vietnam and Thailand to further expand in Asia.

As for UPS, the US company has a network with coverage between more than 220 countries. According to its statement in 2015, North America and Europe accounted for the largest share in revenue; yet media reports revealed that China and India's blooming's need for international delivery services have driven UPS's businesses growth in Asia Pacific the past three years.

Ross McCullough, president of UPS Asia Pacific,described the joint venture as an "exciting" partnership. "Our combined efforts will result in new logistics products and services to simplify and accelerate B2B and B2C customers’ cross-border trade."

Alan Wong, group vice president of SF, added, "China is leading the world in terms of e-commerce market size, growth, penetration and mobile business usage. Coupled with a rapidly growing and internet-savvy consumer base, it’s imperative that SF and UPS collaborate to revolutionize the logistics sector. Together, we aim to bring greater competitive advantages to our customers in China, to succeed globally."