UPS Sees Strong Pick up in Asian Business

SHENZHEN, May 20 -- United Parcel Service Inc (UPS), the world's largest package-delivery company, said on Tuesday its Asian business has been unaffected by the European debt crisis and it sees strong growth from the region during the second quarter.

Most of the major European countries that trade with Asia, like Germany, France and the United Kingdom, have been resilient to the crisis, and hence there is little negative impact, Daniel Brutto, president of UPS International, said in Shenzhen, Guangdong province.

UPS said the strong Asian demand has been spurred by growing intra-Asia trade and more exports to the United States and Europe.

"Intra-Asia trade will grow faster than that of Europe or the US," said Derek Woodward, UPS Asia-Pacific President. However, he declined to give a forecast for second-quarter growth.

Woodward said the company's Asia trade rose 20 percent during the first quarter, whereas the US volume grew by less than 1 percent.

Intra-Asia trade will grow at an average rate of 12.2 percent annually through 2020, compared with Asia's trade with the US, which is expected to grow 7.3 percent annually over the same period, according to a Time report.

Meanwhile UPS on Tuesday opened an Asia-Pacific air hub in Shenzhen to replace operations at the former Clark Air Force Base in the Philippines.

The hub, with a total investment of $180 million, is now the US company's biggest air hub in Asia. Its 400 employees will be capable of sorting 18,000 packages an hour.

To increase its capacity in the country, UPS also plans to add two freighters in Hong Kong and 11 in Shanghai from June 1.

In 2008, the company opened its $125 million international air hub in Shanghai. While the Shenzhen hub is positioned for flights within Asia, the Shanghai unit connects China and other Asian countries with Europe, the US and the Middle East.

In February 2009, UPS' rival FedEx Corp opened a $150-million Asia-Pacific hub in Guangzhou. Its main Asia hub was also based in the Philippines previously.

DHL-Sinotrans International Air Courier Ltd (DHL) last year also broke ground on its North Asia hub in Shanghai after it completed expansion of its Central Asia hub in Hong Kong.

The North Asia hub, with a total investment of $175 million, is likely to be put into operation in the second half of this year.