By Alex Hawkes
Global giant United Parcel Service (UPS) reveals how to deliver a world class airfreight express service.
A rich heritage surrounds the brown and yellow colours of UPS. Last year, the global giant celebrated its 100th anniversary of operation having begun life as a humble messenger company in the United States.
UPS is a global, regional and local company in the way it goes about doing its business.
Today it stands proud as a US$42.6 billion corporation claiming to be the largest express carrier and package delivery company in the world. Inevitably, the brand has made its mark on the Middle East, aligning its services acutely with its broad global network.
"UPS is a global, regional and local company in the way it goes about doing its business. We are visible in 220 countries and territories and currently have roughly 447,000 employees worldwide," says John Tansey, country manager, United Parcel Service (UPS).
"In the UAE, we are a little bit smaller than the global picture. We possess the typical UPS footprint which is best symbolised in the fact we offer the type of services you expect from UPS in other markets," he clarifies.
A fact that distinguishes UPS from other global express companies attracted to the region's strength as a transport hub lies in its fleet capabilities. Affectionately dubbed ‘brown tails', UPS aircrafts arrive into Dubai on a daily basis.
Reportedly possessing the ninth largest airline in the world, UPS own a staggering 284 aircrafts and charter a further 325.
Operating 796 international flights each day to 389 airports worldwide, a further 1130 daily flights are operated to serve its native US customers.
From the southern US point of Kentucky, the UPS main global air hub in Louisville is interlinked with other air hubs in Europe, Canada, Asia Pacific, Latin America and Caribbean.
This includes destinations such as Cologne in Germany, Hong Kong in Singapore and Pampanga in the Philippines.
"Our major gateway to the Middle East is Dubai, where you can regularly see UPS brown tails flying over the Emirate's skies."
"Bahrain is also an important access point and through a combination of the two, we are generally able to infiltrate all the main countries in this region," notes Tansey.
"If you look at UPS in the UAE, the point we like to get across is that we are part of a global, regional and local network."
"What we offer in the market today is full access to a complete supply chain, so be it a document or large sized freight, consolidated or single piece movement, UPS has a multimodal suite of transport options to fit," he added.
UPS first entered the Middle East in 1987, when import operations were established in Bahrain. It has since developed a service portfolio designed to combine local market expertise with international standards.
In 1996, the package delivery company entered a joint venture with the Gulf Agency Company (GAC), marking its arrival into the UAE market.
Currently, 15 flights arrive per week into Dubai en route from the Cologne hub to the Far East or vice versa. Such a figure fluctuates depending on peak seasons as the company attempts to cater for cargo largely deriving of express volumes.
Common UPS aircrafts arriving into Dubai include MD-11s and Boeing 757s, while UPS has also recently released plans to include its 747-400 model on the routes.
UPS is a young company even though it is over 100 years old as it is always changing.
"At the moment, our aircrafts arriving into Dubai are part of the UPS worldwide flights. They fly between the hub in Cologne and the Far East, stopping off in Dubai to both collect and deposit freight.
Arriving volumes are then sorted at the country depot before being delivered across the Middle East," Tansey elaborates.
Supporting the arriving aircrafts into Dubai is a presence at both Dubai Cargo Village and Dubai Airport Free Zone (DAFZ). The Dubai Cargo Village site offers 850m2 of handling, whereas the DAFZ facility provides a more extensive 1750m2 area.
As with all UPS networks, the facilities are interlinked with a country depot. Located in Al Quoz, the handling station is responsible for redistributing all incoming airfreight around the entire Middle East and Levant region.
"We are a significant contributor to the market in all our products. We have experienced double digit levels of growth for 39 quarters, which is consistent with levels of market growth in this region."
"It also fits well with our global group's expectations," says Tansey.
In this region, UPS falls under the Europe, Middle East and Africa branch, which is managed from Milan in Italy.
Its impressive growth specifically in the UAE is in part due to its close relationship with local logistics provider, GAC. Tansey explains that such partnerships are common within the UPS framework.
"The UPS way of working globally is to be wholly owned in many countries, have joint ventures in others and service agreements and agents in the remaining.
It is dependent on the country and arrangement," he says.
"In the example of the UAE, our express service is a joint venture, but it operates with UPS management and procedures so is in effective UPS."
"We look at our partners very clearly, they must possess a similar mindset and operating ethos while understanding the way in which UPS wants to grow its business and relationship with customers," he continues.
The UAE, in particular Dubai, is no stranger to global express providers, and with mounting pressure from local providers such as Empost, how does UPS remain a market leader?
Tansey is quick to attribute this answer to two factors, the phenomenal growth of the region itself combined with the unrivalled UPS global standard.
Highlighting the UAE's strong approach to encouraging foreign investment, Tansey points towards projects such as Jebel Ali Free Zone and developments at Dubai International Airport as important ingredients to the company's rise.
Population growth is another area he believes to be key for the future of UPS.
"There is a huge increase in youth within this region who will soon enter the business world. The growth here is consistent in all areas in and out of the market and I can see it continuing for the foreseeable future," he ponders.
Tansey is also optimistic that the Middle East is making considerable strides towards improving infrastructure for its booming transport sector.
He points to customs control as the lynchpin issue, suggesting a closer working relationship between customs and transport companies.
"Commerce is enhanced when information is passed early and electronically. At the moment, there are initiatives in place working towards achieving just that, which is very positive for us," he says.
In regards to how UPS has brought its own values to the market, technology seems a vital tool in securing a towering position within the regional market.
With the parcel and express sector demanding enhanced efficiency world over, the UPS system enables an advanced visibility to customers wishing to monitor the precise details of their package.
Before goods are sent, electronic information is sent across to a destination in order to receive advanced clearance. A constantly evolving network, particular attention is paid to upgrading all UPS systems.
"These types of systems are created, developed and improved dependant on customer needs.
A customer comes to us with a requirement, the paper work is then completed and the information can subsquently be sent directly by SMS or email."
"A large part of what our customer base search for in the modern market is complete reassurance and visibility," explains Tansey.
Its global backbone also leaves the transport and express provider fully equipped to deal with a number of the pressing issues facing the airfreight industry.
Taking recent fuel price increases as an example; UPS has experienced such fluctuating costs in the past and puts a strong emphasis on sharing the burden of fuel surcharges with its customers.
An issue more close to home, recruiting nationals is also high on the company's agenda.
"Not just in the UAE but on a global scale, UPS wants to be the employer of choice," says Tansey.
"An element of this is localisation and another is to regularly work with students."
"Many of the mangers currently in the business have entered straight from college and personally I think this industry is vibrant, there is a not day that goes by when something different hasn't happened," he smiles.
Far from resting on its one hundred year milestone, UPS confronts every day with a fresh approach, an ethos that Tansey attributes strongly to its historical success.
"We consider ourselves a true integrator in the sense that our portfolio is not limited to a service or a place. UPS is a developing resource for customer solutions," he considers.
"UPS is a young company even though it is over 100 years old as it is always changing."