UPS Launches Express Service for Customers Within China
ATLANTA, July 7, 2005 - In a move that recognizes the dramatic business opportunities being created inside China, UPS (NYSE:UPS) today announced it would offer express package service across much of the country by September.
UPS is the first global package delivery company to establish large scale wholly-owned operations within China. The company said it is now building on this advantage to expand into domestic express service in the country. The new UPS operation will initially link 23 major metropolitan areas with next-day service. The contract-only service already is available to selected customers in five major metro areas, with the balance to be implemented by September. UPS said the new service will not have a material impact on financial performance in 2005.
"We intend to have the most extensive package delivery and logistics offering to, from and within China," said David Abney, president, UPS International Operations. "This move increases the value proposition that UPS brings to businesses within China as well as to global companies with multiple operating locations in China. It also recognizes the longer term potential of a rapidly growing consumer marketplace in China."
Approximately 80 percent of China's international trade is generated within the territory that UPS will serve and these same areas are expected to experience fast-growing domestic trade as well. The company said it plans to expand its domestic China express service in the future beyond the initial 23 major metropolitan areas.
UPS began taking control of its operations inside China under an agreement announced last December. The deal, reached with UPS's long-time China partner Sinotrans, opened the way for operations in the 23 business centers to be transferred to UPS by this September.
UPS said the combination of its expanding package delivery operations and supply chain services in China has positioned the company to become the region's premier distribution and logistics provider.
In just the last year, the company has expanded to 18 the number of weekly jet flights to and from China and will add another three daily flights in 2006. Those flights are supporting international express volume into and out of China that has seen dramatic growth in recent quarters. In April, UPS became the first U.S. airline to launch non-stop service between the United States and Guangzhou, which lies strategically in one of China's fastest growing manufacturing regions.
In addition, UPS Supply Chain Solutions, the logistics arm of UPS, has opened three new warehouse and freight distribution centers in Shanghai, Suzhou and Futian and is executing plans to open another 20 facilities in major cities over the next two years. UPS Supply Chain Solutions already is operating more than 40 logistics centers in China.
UPS is the world's largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS's stock trades on the New York Stock Exchange (UPS) and the company can be found on the Web at UPS.com.
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Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated herein by reference.
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