Joint venture with leading Chinese express and logistics operator aims to combine networks and develop innovative services and synergies
UPS and SF Holding, the parent company of one of China’s leading express and logistics operators, SF Express, today announced plans to establish a joint venture to develop and provide international services, initially from China to the US but with plans for further global market expansion.
The tie-up, which is subject to regulatory approval, “will establish a platform to support the creation of innovative new-to-market B2B and B2C products and services enhancing market access”, the US package delivery giant said.
UPS described SF as “a market leader in express delivery in China with extensive China-wide network coverage, comprehensive service capabilities, and the highest brand recognition in the Chinese small package market”. At the start of this year, the company, which has a freighter fleet of close to 40 aircraft and operates an extensive ground network across China, unveiled plans to build a mega-hub airport in a central region of the country as part of an ambitious long-term growth strategy.
The planned joint service offerings aim to combine the strengths of SF’s extensive Chinese network, encompassing more than 13,000 service points in the world’s largest and fastest growing package delivery market, with UPS’s global network. UPS said alignment of the partners’ shipping networks would provide customers with greater coverage, additional routing options, increased capacity, and more choice in transit times and service options.
Commenting on the joint-venture, Alan Wong, group vice president of SF, said: “China is leading the world in terms of e-commerce market size, growth, penetration and mobile business usage. Coupled with a rapidly growing and internet-savvy consumer base, it’s imperative that SF and UPS collaborate to revolutionize the logistics sector.”
UPS said the joint venture “supports the creation of competitive synergies for UPS and SF through the combined scope and scale of both companies’ complementary networks. Both companies will utilize their own assets to enhance operational effectiveness and efficiency while aligning business processes in order to provide seamless customer care for all parties shipping out of China.”
Earlier this month, one of SF’s major Chinese peers, YTO Express, which is backed by Alibaba, announced that it was purchasing a majority stake in Hong Kong-based On Time Logistics which it plans to use as a springboard for international expansion.