United Parcel Service Inc. (UPS), which gets about a quarter of its revenue from overseas, is adding two distribution facilities in China, bolstering its operations in the world’s most populous nation.
The contract logistics centers are in Shanghai and Chengdu and add 117,000 square feet (10,870 square meters) of space, Atlanta-based UPS said today in a statement. They are near major airports and road networks, and will serve technology, aerospace, retail and industrial manufacturers, UPS said.
Building a distribution network in China will enable UPS to take advantage of growth that the World Bank projects will make the Asian country the largest economy by 2030, displacing the U.S. The facilities bring UPS’s total number in China to more than 130, covering 87 cities.
“It’s about longer-term demand within China,” Jim Barber, 53, president of UPS International, said in an interview. “They need goods and services, and logistics is a piece of that. Every economy in the world is in a state of flux. Two new facilities in an economy like China makes sense for us.”
The facilities will ship components for items such as computers and smartphones to manufacturers throughout China and Asia, where they will be assembled into products that will then be distributed back into the region or exported, Barber said. Health-care, retail and aerospace products may also be handled, he said.
The Chengdu distribution center is 47,000 square feet and is less than three miles (4.8 kilometers) from the airport that connects businesses in central and western China to the rest of the world. The Shanghai facility is 70,000 square feet and is UPS’s fourth in the area.
China’s gross domestic product is forecast to expand by 7.5 percent this year, making it one of the fastest-growing economies, even though the rate has decelerated from more than 10 percent in 2010.
“If you look at the economies in the world, China still has great growth to us,” Barber said. “Our investment is different in each. We choose to invest when the time is right and the supply chain is moving.’
UPS is the world’s largest package-delivery company, and handles more than 16 million packages and envelopes per day.
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