UPS will move its intra-Asia air hub from the Philippines to Shenzhen, China in the Pearl River Delta. The company says locating the hub outside Hong Kong will cut a day off shipment times in transit for Asian customers. The hub is expected to be operational by 2010 and represents an investment of approximately $180 million.
The Shenzhen hub, expected to total about 89,000 square meters in size (almost 1 million square feet), will include an express customs handling unit, sorting facilities, cargo handling and cargo build-up areas and ramp handling operations. It will be capable initially of processing up to 18,000 pieces per hour compared to the existing 7,500 pieces per hour in the Philippines. The company says the hub can be easily expanded to a capacity of 36,000 pieces per hour. It will employ about 400 people
“Shenzhen's strategic location will provide significant advantages, allowing UPS to better serve the growing Asian markets along these rapidly expanding trade lanes,” said Dan Brutto, president, UPS International. “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 the southern rim of China, it now makes more sense to sort and dispatch this volume from a hub closer to our customers,” explained Brutto. “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. UPS is very grateful to the Shenzhen government and Shenzhen Airport Authority for their strong support of our expansion and we look forward to a successful partnership.”
UPS long has pursued a multi-hub strategy in Asia with existing facilities in the Philippines, Taiwan, Hong Kong and Singapore. The hub in the Philippines, located in Pampanga at the former Clark Air Force Base, opened in 2002 and became the site for a large sorting facility to handle packages destined for other points in Asia. The other three hubs generally handle volume moving in or out of Asia to North America and Europe.
The existing facility at Clark will continue to be a strategic location for UPS's multi-hub network in Asia. In addition to Clark's role as the main import and export gateway for the Philippines, UPS also is exploring placing alternative operations there.