UPS plans to expand intra-Asia service

United Parcel Service (UPS) sees more growth in trade among Asian countries than anywhere else in the next decade, a top executive at the world's largest package delivery company said.

The company plans to expand service by adding intra-Asian flights and larger planes for them in 2011, Dan Brutto, president of UPS international, told Reuters.

UPS's intra-Asian business will grow at a high double-digit percentage rate over the next decade, he said.

"We used to look at intra-Asia as a kind of afterthought," he said. "Now we are rethinking our whole intra-Asian network."

Some of the company's five new 767 airplanes, which have almost double the capacity of the 757s they are replacing, will probably serve intra-Asian trade routes as those countries form bilateral trade agreements without working through the World Trade Organisation's more involved process, Brutto said.

"They're saying, 'We've had a great run with the US and Western Europe, but we've realised we have too many eggs in one basket,'" Brutto said. "The downturn really caused people to rethink trade."

Ocean trade from China to the United States in the months leading up to the Western holiday season has increased only slightly from a year earlier, which is a sign that retailers are still uncertain about holiday demand, Brutto said.

UPS is also considering adding flights, facilities and service offerings in Mexico, which is trying to be less reliant on trade with the United States.

Israel's robust high-tech and pharmaceutical industries make it another growth prospect, Brutto said. The nation is home to Teva Pharmaceutical Industries, the world's largest generic drugmaker.

UPS currently works in Israel through an agent, OPSI Ltd. It typically invests in or buys its local agent when the country's economic base shifts sufficiently to exports.

"We're talking to our agent about an opportunity," Brutto said. "It's on the path, and the timing is pretty close."

Russia is a slightly different story, Brutto said.

He had to postpone a trip there planned for early October because an airport facility scheduled to open in September is now delayed until December.

"I'm not going to open a building that's not ready to open," he said. "Russia continues to be very difficult to deal with."
(Source:www.cargonewsasia.com)