UPS Wins Rights to Triple China Service

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UPS Wins Tentative Go-Ahead for Expanded Access to China

Press Release


DOT Decision Triples Aviation Access to Key Asian Market

WASHINGTON, D.C., Sept. 3, 2004 – The U.S. Department of Transportation (DOT) has tentatively authorized UPS (UPS) to significantly expand its air operations in China.

The decision, tripling UPS’s access to China over the next year, will provide significant opportunity for UPS to continue growing its business within the region while providing customers with service in all segments of the market – from general freight to express delivery.

UPS currently flies from the United States to China six times per week. Today’s tentative decision grants UPS six additional frequencies to Shanghai immediately and six new frequencies to Guangzhou next year. The new frequencies will allow UPS to connect Shanghai to Japan for the first time with non-stop service, and the 2005 frequencies will allow UPS to offer non-stop service from the U.S. to Guangzhou for the first time.

The United States and China negotiated a new bilateral agreement earlier this year that opened the door for expanded aviation rights. UPS formally applied for the new authority in July.

“The new flights will allow UPS to greatly enhance service to this leading global market, to the benefit of customers around the world,” said UPS Chairman and CEO Mike Eskew. “This provides an extraordinary opportunity for strengthening commercial supply chains that support growing international trade between the United States and China and throughout the world.”

UPS successfully entered the China market in 1988 in partnership with China’s Sinotrans and then began direct air service in 2001. It has experienced double-digit growth in the U.S.-China market over each of the last three years. Last year, UPS became a strategic investor in Sinotrans through an initial public stock offering and also became the first foreign air express carrier to form a commercial relationship with a domestic Chinese air carrier – Yangtze River Express – cutting a day off delivery times within the region.

UPS also began its operations throughout the rest of Asia in 1988 and currently serves more than 40 countries and territories in the region. UPS operates air hubs in Taipei, Hong Kong, Singapore and the Philippines and was the first in the industry to offer non-stop service from the United States to China. Any additional rights provided to UPS under the new bilateral accord, including the establishment of a new hub in China, will complement UPS’s existing air network in the region.

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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This is great news! Now if only they could settle on a contract and start hiring.



Fly Safe

 

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FedEx gets a piece of the pie too

DOT 166-04
Friday, September 3, 2004
Contact: Bill Mosley
Tel.: (202) 366-4570


DOT To Award
New U.S.-China Air Cargo Rights

The U.S. Department of Transportation (DOT) today proposed to name Polar Air Cargo as a new entrant in the U.S.-China market, and to distribute a total of 39 new weekly all-cargo flights among Polar and the three U.S. airlines – FedEx, Northwest Airlines and UPS – currently operating U.S.-China all-cargo service.

The new services were made available by the U.S.-China aviation agreement signed July 24 in Beijing by U.S. Transportation Secretary Norman Y. Mineta and Civil Aviation Administration of China Minister Yang Yuanyuan.

“This marks the first step in an unprecedented expansion in all-cargo aviation services between the United States and China,” said DOT Assistant Secretary for Aviation and International Affairs Karan Bhatia. “Today’s action will benefit American shippers, American workers and American consumers.”

The department noted that China is already the United States’ largest transoceanic trading partner and is expected to grow faster than any other U.S. air freight market over the next two decades.

The agreement allows a total of 195 new weekly flights over the next six years for the carriers of each country – 111 by all-cargo carriers and 84 by passenger airlines. Prior to the new agreement, the carriers of each country could operate a total of 54 flights per week. This means that at the end of the six-year period, each side may operate a total of 249 weekly flights between the two countries. Of the new cargo flights, 21 are available for operation now and 18 may be added on March 25, 2005. The agreement also allows five additional airlines from each country to serve the U.S.-China market over the next six years, including the one additional U.S. all-cargo airline that may begin service this year.


The department proposes to award Polar nine weekly U.S.-China flights, six of which are available now and three beginning March 25, 2005. In addition, the department proposes to award the three carriers currently operating all-cargo service to China new weekly flights to expand their operations in the market.

If the tentative decision becomes final, FedEx and UPS would each receive 12 additional weekly flights, and Northwest would receive six. For each of the three incumbent carriers, half of the new flights would be available now, and the other half on March 25, 2005.

In a separate order today, the department asked for applications for new services to China that will become available over the next two years. The department will select a carrier for new-entrant passenger service, and award seven weekly passenger flights for U.S.-China service that may begin March 25, 2005. DOT also will select either a new passenger or all-cargo carrier for service that may begin March 25, 2006. It will also allocate seven new weekly passenger flights and 12 new weekly all-cargo flights that become available at that time.

On July 23, the department granted the first new passenger flights made available by the new agreement, awarding seven weekly flights each to United Airlines and Northwest.

In addition to Polar, carriers also seeking the new-start designation are Arrow Air, Evergreen International Airlines, and Gemini Air Cargo.

The show-cause order, carrier applications and comments are available on the Internet at http://dms.dot.gov, docket OST-2004-18468. Interested parties have seven days to object to today’s show-cause order, and answers to objections are due four days after the objection deadline. The department then will review comments and issue a final decision.