UPS and Chinese transport and logistics company SF Holdings today announced plans to establish international delivery services, starting with deliveries from China to the United States, with plans to add more countries in the future. The joint-venture deal clears a path for cross-border e-commerce sellers in China looking to access the U.S. market, providing integrator-level service between the world’s two largest economies.
The agreement allows both parties to leverage their complementary networks, service portfolios, technologies and logistics expertise. However, regulators have yet to sign off on the deal.
SF Holdings is the parent company of Chinese express logistics carrier SF Express, which will presumably provide the metal on the mainland side of the deal. UPS, meanwhile, is expected to bring its entire integrator network and infrastructure into play, providing end-to-end delivery potential in both countries.
SF is one of China’s two largest express companies, and its airline subsidiary currently operates the largest express freighter fleet in the country. While the joint-venture will undoubtedly seek to leverage both company’s extensive assets and delivery networks – which for SF includes more than 13,000 service points and thousands of delivery personnel and vehicles within in China – it remains to be seen just how the airfreight cooperation will play out.
Charles Kauffmann, writing in Air Cargo World’s sister publication Cargo Facts, noted that, with an order by UPS for fourteen 747-8Fs on the books, the cooperation will likely utilize UPS’ widebody freighters on trans-Pacific routes. “This likely means that UPS’ 747-8Fs, and other widebody aircraft will become a normal sighting at SF’s future global air freight hub, currently under development near Wuhan, in central China. SF does not currently operate anything larger than a 767, but after recently going public, they certainly possess the means to finance the purchase of larger aircraft.”
“This joint venture will support products that provide competitive benefits to our Chinese customers who trade or seek to trade internationally,” said Ross McCullough, president of UPS Asia Pacific. “Our combined efforts will result in new logistics products and services to simplify and accelerate B2B and B2C customers’ cross-border trade.”
Cross-border e-commerce between China and the U.S. is at the heart of this deal, with SF Group vice president Alan Wong noting that, “China is leading the world in terms of e-commerce market size, growth, penetration and mobile business usage.” Wong added that, “Coupled with a rapidly growing and internet-savvy consumer base, it’s imperative that SF and UPS collaborate to revolutionize the logistics sector.”