|
SAYING
its Philippine operations have proved to be too far for
its customers and relocation was the only option to
significantly cut transit time, United Parcel Service
Inc. (UPS) Wednesday announced plans to transfer most of
its intra-Asia hub operations from Clark Field, Pampanga,
to the bustling city of Shenzhen in China in 2010.
Andy
Connelly, the company’s senior vice president for
Asia-Pacific, told reporters that they have already
informed their employees and the authorities in Manila
and in Clark about the move.
“We have
reviewed our network and we have to make a judgment and
move our hub to Shenzhen,” Connelly announced to
reporters, some of whom were based in Pampanga.
“We have
to locate the center of the gravity, since 70 percent of
the intra-Asia hub comes from Northern Asia.”
Connelly
said UPS would gradually reduce its work force of about
200 employees today to just 70 in the next two years.
During that time, Clark operations will only have two
aircraft from the current nine.
“We want
to retain everybody and we are looking for their
alternative employment [outside of its Clark operations]
for them,” Connelly said when asked about the company’s
plans on its existing work force. He added that there
won’t be any layoffs.
UPS’s
measure followed the move of Federal Express (FedEx)
last year to totally move out its operations from
Subic Bay to
China by 2010 after the Subic airstrip could not
accommodate its larger aircraft.
All of
the hubs of UPS, Fedex and DHL, the world’s top three
package-shipping companies, are located in either China
or in Hong Kong.
“There’s
a reason why the three of us [UPS, Fedex and DHL] are in
the same area,” Connelly said.
Joseph
Guerrisi, UPS vice president for marketing in
Asia-Pacific Region, explained that their decision to
move was firmed up after the United States government
secured air rights with China, that took effect on
January 2007.
Guerrisi
said that when UPS set up its
Clark operations in 2002, the
US
government had no agreement yet with
China. To better serve its customers, who mostly come from
northern
Asia,
package shipping companies would have to set up
facilities in either the Philippines, Taiwan, Hong Kong
or in southern China.
“Even if
our hub is located in, say
Kuala Lumpur
or in Vietnam, we will move our operations to China
anyway. It is the changing regulatory framework [that
helped UPS to decide on its move],” he said.
The
markets of
China,
Hong Kong, Japan, South Korea and Taiwan account for
more than half of UPS total intra-Asia volume.
UPS
invested about $300 million in its
Clark operations since 2002, including the price of the aircraft
being used.
Its
facility handles about 7,000 pieces of cargo per hour.
Some of its facilities in Clark will be transferred to
China, especially the aircraft.
UPS’s
Shenzhen operations, on the other hand, will be bigger
than that of the Philippines. It will employ an initial
400 workers who will process about 18,000 pieces of
cargo an hour, which could easily increase to 36,000
pieces of cargo an hour.
Shenzhen
operations, UPS officials explained, will be beneficial
to the company since there are also cargo volumes that
come from China itself, unlike in the Philippines where
there are little shipments since the local economy is
not as large, and the rest are coming from somewhere
else.
UPS said
they will still retain all of its facilities in Clark,
although at significantly reduced levels, since it still
has to honor its 25-year lease on the property. |
