UPS is targeting express and logistics services growth in South Korea following the agreement tobuy full control of its express joint venture with Korea Express.
Korea Express (KEC) will sell its 40% stake in the joint express company, which was createdin 1996, to UPS for an undisclosed sum. KEC had announced the sale yesterday, saying it aimed toreduce its reliance on UPS for international package services. The two companies also signed acooperation agreement for continued collaboration, taking account of UPS’s global network andinfrastructure and KEC’s local network and customs brokerage operations.
UPS said in a statement that the transformation of the joint venture to a wholly-ownedsubsidiary will allow it to grow its business in Korea and better serve its customers in a keymarket. UPS expects to enhance its levels of reliability and to further build its brand presence inKorea. As part of its strategy to provide total integrated logistics solutions, UPS will beginintegrating its Supply Chain Solutions operation with the newly-formed package express entity tooffer a single UPS branded portfolio.
“UPS and KEC have had a successful partnership in Korea for more than 10 years, but UPS hasarrived at a point where we need greater flexibility to match our commitment to this importantmarket,” said Derek Woodward, president of UPS’s Asia-Pacific Region, noting that Korea now is theUSA’s seventh largest trading partner.
“With the establishment of wholly-owned operations in Korea, UPS will have the flexibility itneeds to invest in facilities, infrastructure, technology and employee development and to expandoperations,” Woodward continued.
“And our customers will have the confidence of knowing we can stay ahead of demand in amarket that is rapidly growing in importance, particularly in light of the pending US-Korea FreeTrade Agreement.”
UPS began operating in Korea in 1988. The company operates 31 weekly flights to and fromIncheon Airport using B-747, B-767 and MD-11 aircraft connecting Seoul to Qingdao, Shanghai, Taipeiand Anchorage.
