A planned air hub for logistics giant UPS in Shenzhen is expected to intensify competition in international express service among the big players in China.
Sources from Shenzhen Airport (Group) Co Ltd said the hub is expected to be operational February 9, and will see 14 round-trip cargo flights between nine countries and regions in its first stage, the National Business Daily reported Saturday.
Li Xiang, a public relations representative for UPS, confirmed the opening news but said "the date will fall in the first quarter of this year," without being more specific.
The Shenzhen hub will be the second transfer center for UPS since it launched its China business in 2005, and will make it the first company on the mainland with two large transfer centers handling international express business.
In December 2008, UPS opened an international air hub in Shanghai Pudong Interna-tional Airport targeted at connections with direct service to US and European destinations.
Currently, Germany-based DHL is spending $175 million to build a north Asia express transfer facility in Shanghai, which will be completed in 2012.
In February last year, US-based FedEx closed down its Asia-Pacific airtrans-shipment hub in the Philippines and moved it to Guangzhou.
The triangle formed between Asia, Latin America and Africa via the Middle East is expected to contribute almost 40 percent of global trade by 2028, according to figures provided by DHL last year.
"If we look at the global logistics market in 1999, Asia's share of it stood at 34 percent, or $15.57 billion. By 2008 this figure had grown to $339 billion, making up 46 percent, or nearly half of the worldwide market," Hermann Ude, CEO of DHL Global Forwarding and Freight, said at the APEC CEO Summit 2009 in Singapore, according to a statement from the company.
In China, international express firms have made gains since the sector fully opened in 2005. UPS, FedEx, DHL and TNT have witnessed annual growth of 50 percent, accounting for 80 percent of the international express market and 30 percent of market share in the domestic express market, ac-cording to a 2009 report by the Chinese Academy of Social Sciences (CASS).
By comparison, domestic enterprises saw a fast decline. EMS' international market share has declined from 80 percent in the 1990s to current 20 percent, the report said.
International express services are of high-value and the high-end market is monopolized by international companies, said Jiang Jianye, a CASS researcher, quoted by the Chinese Business Herald last March.
"The pattern...will not change in a short time," said He Dengcai, vice secretary general of the China Federation of Logistics & Purchasing.
Source: Global Times
