The news: UPS has opened an $80 million hub in the Philippines that sorts 12 times as many packages an hour as the one it replaced.
Implications:
Asia legs: Your express shipments between China, Southeast Asia and India can arrive up to two days sooner on UPS.
US lanes: The two-day gains are on lanes inside Asia. For the US, UPS gives only a network-wide promise of service in as little as one business day.
The News
UPS has opened a more than $80 million hub at Clark International Airport, north of Manila, that can sort up to 15,000 packages an hour, 12 times what its old building handled.
The 323,000-square-foot site is the first to open under UPS’s more than $2 billion international investment plan, which also includes a new facility in Barrie, Ontario, and a Hong Kong air hub.
UPS says the hub improves service on more than 1,100 trade lanes.
Why It Matters
UPS is moving air capacity to where its volume is growing.
Its Asia-to-Asia export volume rose 13.6% year over year in Q2, while its China-to-US lane lost 35% of its daily volume in May and June last year, when US tariffs and the end of duty-free entry for small parcels cut online orders.
That means more and faster UPS flights between Asian suppliers, while the speed gains stay on lanes inside Asia.
Zoom In
UPS lists four service changes from the new hub:
Eastern China: delivery to and from eastern China and other major Asia Pacific markets is up to two days faster.
Southeast Asia and India: service between several Southeast Asian markets and India is up to two days faster.
Pickups and deliveries: pickup cutoffs move later and deliveries arrive earlier in cities across the region.
The wider network: Clark links businesses across Asia Pacific, India, Europe and the US in as little as one business day.
The hub handles 46,000 packages a day on average, up from 5,000, and UPS runs 170 flight segments a week at Clark. Some of them use six Hong Kong traffic rights the US Department of Transportation let UPS shift from its Warsaw and Hanoi routes to a new Hong Kong-Clark route. Those rights let a carrier continue from Hong Kong to a third country.
Who’s Exposed
North American shippers feel the change through their suppliers in Asia:
Electronics and industrial makers: the hub has specialized handling for high-tech and manufacturing shipments that are time- or temperature-sensitive.
Healthcare shippers: three refrigeration and freezer units run from -20 to 25 Celsius, with re-icing and RFID tracking for time- and temperature-sensitive shipments.
Suppliers in the Philippines: President Ferdinand Marcos Jr. said the hub’s dedicated customs and immigration lanes will speed cargo clearance.
What’s Next
Oct. 31: the deadline for Asia Pacific Airlines to start seven weekly Hong Kong-Manila cargo flights. UPS has said it will contest any further delay and ask the DOT for those rights, which would add to its Philippines flying.
Dig Deeper
The UPS release: the lane-by-lane service changes and the hub’s specs.
How UPS shifted its planes: the first round of new intra-Asia capacity after the China-US lane dropped.
