UPS and the Shanghai Airport Authority have signed an operating agreement and lease contract for the UPS International Air Hub at Pudong International Airport in Shanghai, which is expected to open in 2008.
The UPS International Air Hub will be the first constructed by a US carrier.
It will link all of China via Shanghai to UPS's international network with direct service to the Americas, Europe and Asia. It also will connect points served in China by UPS through a dedicated service provided by Chinese all-cargo airline, Yangtze River Express.
The signing of the operating and lease agreements are a direct result of the Agreement on Sino-US Civil Aviation Transportation Air Services signed by the Chinese and US governments in July 2004.
The establishment of the UPS International Air Hub is a significant step in making the Shanghai Airport an international cargo hub, promoting the development of the Shanghai transportation centre and upgrading the service functions of the city of Shanghai.
Under the 2004 Air Services agreement, UPS will find it easier to expand its international and Chinese networks in the future while immediately gaining new flexibility in the way it schedules its flights now.
The hub project is the latest in a series of strategic initiatives to expand UPS's operations and brand presence in China. Over the past five years, UPS has invested approximately $600 million in China, including its successful transition to become the first wholly-owned foreign express carrier in China.
The new hub will be located in the southern end of the West Cargo Terminal Area under construction at Pudong International Airport. The hub sorting capacity is projected to reach 17,000 pieces per hour by 2012.
The hub will operate 24/7, and UPS will increase its capacity into Shanghai by up-sizing aircraft from the current MD-11s to Boeing 747-400s.
UPS currently operates 76 takeoffs and landings per week in Shanghai, with an additional 24 dedicated movements operated by Yangtze River Express. This will increase as the new hub becomes operational and the capacity at Pudong International Airport continues to expand.
Wu Nianzu, chairman & president of the Shanghai Airport Authority, said that, to ensure the timely completion and operation of the UPS hub, the Authority is currently constructing the third runway and the West Cargo Terminal Area of Pudong Airport.
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