Asian growth boosts UPS revenue - Brief Article

Business Asia, Feb 11, 2000

Significant growth in the areas of logistics and e-commerce has helped UPS report record results for the fourth quarter, highlighted by gains in its core domestic and international package business.

The results led to a record full year with revenues exceeding US$27 billion.

For the three months ended December 31, 1999, revenues totalled US$7.45 billion, up 11.7 per cent compared with the US$6.66 billion reported for the same period a year earlier.

Revenue gains for the quarter were driven by a 10 per cent increase in domestic packages, a 15 per cent increase in international exports and a substantial increase in the nonpackage segment.

Total global package volume averaged 14.24 million pieces a day in the fourth quarter, a 5.6 per cent gain over 1998's fourth quarter. The results included a 10.4 per cent increase in domestic Next Day Air and an 18.3 per cent increase in daily international export volume.

The Asia-Pacific region registered a healthy volume growth of over 25 per cent for the fourth quarter in 1999 alone compared to the same period in 1998.

Major markets, such as Singapore, Hong Kong and China also recorded an impressive growth of over 30 per cent in total export premium volume in 1999 when compared to the year before.

"The recovery of the Asian economy is clearly well under way. UPS is optimistic that the new millennium will spell greater promise for Asia and, in turn, the air express industry," said Charles Adams, senior vice-president, UPS Asia Pacific.

For all of 1999, revenues totalled US$27.05 billion, an increase of 9.1 per cent over 1998 revenues of US$24.79 billion.

"UPS has again demonstrated the ability to deliver superior financial returns. We expect another good year in 2000 as these positive trends continue," said Robert J. Clanin, UPS chief financial officer. "No company is better positioned to serve the world of digital commerce than UPS, and our logistics expertise is being recognised around the world. We will continue to leverage our global infrastructure and core package delivery products."

The fourth quarter included the busy holiday peak shipping season and, with it, strong evidence of consumers' increasing embrace of the Internet and retail e-commerce.

On-line tracking activity at UPS's web site established a new all-time record of 3.3 million requests in a single day, and the combined air/ground volume on the single busiest day of the peak season hit 18.7 million packages compared to the 18 million forecast.

Good weather, a strong economy and a flexible, solid logistics plan allowed UPS to help a number of key customers cope with unexpected surges in demand, particularly those who rely heavily on web-based orders.

In the fourth quarter, UPS took steps to strengthen its international and logistics businesses with acquisitions that included the French logistics company Finon Sofecome, TransBorder Customs Services and Rollins Dedicated Logistics.

UPS also invested internationally in an Asian e-commerce firm known as NetCel360 Ltd. UPS will provide NetCel360 with extensive supply chain management services throughout the region.

During the quarter, UPS also announced that growth in its express package business was prompting the acceleration of deliveries of new Airbus A300-600 jet freighters in the year 2000.