UPS 2009 Annual Report Download - page 15

We have built a strong international presence through significant investments over several decades. Some of
our recent acquisitions and investments include the following:
• In 2007, we implemented the largest service expansion of our international shipping portfolio in more
than a decade. UPS began offering customers three, rather than two, daily time-definite delivery
options to and from the world’s most active trading markets, giving customers greater flexibility in
managing their businesses.
• In 2008, we completed construction of a new hub in Tamworth, England, UPS’s largest ground hub
outside the U.S. It replaced three smaller facilities, and added more capacity and better efficiencies
than existed with the three separate facilities.
• Also in 2008, we acquired our partner’s interest in the small package joint venture operation in
Romania.
• In 2009, we expanded our presence in Eastern Europe and in Central Asia with the acquisition of our
service agents in Slovenia and Turkey, respectively.
• Also in 2009, we set up a joint venture in Dubai to coordinate management and growth of UPS express
package, freight forwarding and contract logistics services across the Middle East, Turkey and portions
of Central Asia.
Growth in Asia is being driven by global demand, which is stimulating improved demographic and
economic trends throughout the region, particularly in China and India. Over the last few years, UPS has steadily
increased air service between the U.S. and Asia.
• In 2007, we added six daily flights between the U.S. and Nagoya, Japan. This new service
complements our 78 weekly flights into and out of Tokyo and Osaka, Japan. These flights connected to
Shanghai in 2008, enhancing intra-Asia service.
• In 2008, we opened a new air hub in Shanghai, the first constructed in China by a U.S. carrier. It links
all of China via Shanghai to UPS’s international network with direct service to the Americas, Europe
and Asia. It also connects points served in China by UPS.
• In 2008, we broke ground on a new intra-Asia air hub in Shenzhen, China, which became operational
in February 2010.
• Also in 2008, we acquired our partner’s interest in a small package shipping joint venture in Korea.
The international package delivery market has been growing at a faster rate than that of the U.S., and our
international package operations have historically been growing faster than the market. We plan to use our
worldwide infrastructure and broad product portfolio to grow high-margin premium services. Additionally, we
plan to expand our non-U.S. domestic package operations by continuing to build our package delivery
infrastructure and through acquisitions in certain countries. We have been and will continue to implement cost,
process and technology improvements in our international operations. We believe that both Europe and Asia
offer significant opportunities for long-term growth.
Supply Chain & Freight Segment
The Supply Chain & Freight segment consists of our forwarding and logistics capabilities as well as our
UPS Freight business unit.
Supply chains are becoming increasingly complex, as shown in Diagram 1. Many of our customers, large
and small, have outsourced all or part of their supply chains to streamline and gain efficiencies, to improve
service, to support new business models and to strengthen their balance sheets.
3