United Parcel Service (UPS) announced a new joint venture with a Chinese package delivery firm to gain a larger share of the e-commerce market in that nation.
The venture is with S.F. Holding, parent company of S.F. Express, the top firm in China’s express delivery segment. The partnership will initially focus on goods moving from China to the United States.
“They built up an incredible network and are absolutely the type of company we like to partner and network with,” David Abney, CEO of UPS, said in a Bloomberg television interview.
Each company plans to invest about $5 million and will be equal partners. S.F. has a customer roster made up of about 1,300 small and medium businesses, and shipped 31 billion packages in 2016.
Abney said the venture is “a very big first step,” and suggested an expansion could take place in the future. The venture will target both the business-to-consumer and business-to-business segments, and will use a mix of airplanes and ocean and rail brokerages.
UPS said China is among its fastest-growing markets. The Atlanta-based company employs 6,400 people in China and operates 200 flights to and from the country each week.
“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.”
UPS has operated in China since 1988.
