UPS Begins Construction of Intra-Asia Hub in Shenzhen

Strategic Location will Enable Shorter Transit Times On Asian Trade Lanes

SHENZHEN, China - UPS (NYSE:UPS) today began construction of its new intra-Asia air hub at Shenzhen International Airport in the heart of China’s Pearl River Delta.

Once completed, the Shenzhen facility will replace UPS’s current intra-Asia hub located at the former Clark Air Base in the Philippines and serve as UPS’s primary transit hub in Asia. The facility is expected to open in 2010.

The repositioning of the air hub will slash at least a day off shipment times-in-transit for Asian customers while offering a new level of service to the manufacturing region located just north of Shenzhen, not far from Hong Kong.

“There are enormous growth opportunities in this dynamic region,” said Daniel Brutto, president of UPS International, who joined a host of Chinese government and UPS officials at the official groundbreaking. “UPS intends to capitalize on this growth by offering superior service. The strategic location of UPS’s Shenzhen Intra-Asia Hub is going to strengthen our position in Asia.”

Currently, the markets of China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS’s total intra-Asia volume. Of this, a sizeable proportion of Asia package export volume now originates in southeast China and Hong Kong.

The UPS Shenzhen Intra-Asia hub will be built on a land area of 89,000 square meters (958,000 square feet) and include a dedicated 150,000-square-meter (1.6 million square feet) ramp provided by Shenzhen Airport, an express customs handling unit, sorting facilities and cargo handling areas.

Package sorting capacity is projected to reach 18,000 pieces per hour with the flexibility to expand to 36,000 pieces per hour. The hub initially will employ approximately 400 people and represents an investment of US$180 million (RMB1.28 billion). The hub will operate 24 hours a day, seven days a week.

“The hub is a strong testament to UPS’s commitment to China and underscores our promise to support our customers’ growth in this fast growing region,” said Derek Woodward, president of UPS Asia Pacific Region. “We are extremely grateful to the Shenzhen municipal government and Shenzhen Airport for their strong support and cooperation.”

“Shenzhen International Airport offers a well established air network that connects 18 countries and 34 cities worldwide with 139 air lanes,” said Dr. Huang Chuan Qi, president of Shenzhen Airport. “With strong demand for cargo shipments, we are pleased to establish a partnership with a logistics giant such as UPS and support them in establishing an air hub here as I believe Shenzhen airport is well positioned to promote intra-Asia trade both economically and geographically.”

Since taking direct control of its international express operations inside China in 2005, UPS has made significant investments in the country. In 2007, UPS signed an agreement with the Shanghai Airport Group to establish a UPS International Air Hub at Pudong International Airport in Shanghai. Expected to commence operations in December, the Shanghai hub will connect China to the UPS global air network, including U.S. and European destinations. It thus will play a substantially different role than the hub in Shenzhen, which will connect all major Asian points.

UPS is the world’s largest package delivery company and a global leader in supply chain and freight services. With more than a century of experience in transportation and logistics, UPS is a leading global trade expert equipped with a broad portfolio of solutions. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. The company can be found on the Web at UPS.com.