UPS set to take full ownership of its express services in India

Earlier this week, UPS said it has made additional investments towards attaining further investment to attain full ownership in its India-based express services unit. UPS formerly held a majority position in an express services joint venture that solely served its international express small package shipping business in India.

“The World Bank tells us that the global economy will expand by $6.5 trillion between 2017 and 2019,” said Rami Suleiman, UPS President for Indian subcontinent, Middle East and Africa (ISMEA), in a statement. “India will be the third-highest growth country with its gross domestic product (GDP) expected to account for 8.6% of this expansion. In recent years, India has emerged as a key player in the shipping and logistics sector and UPS is poised to play a leading role in supporting international trade and supply chain related needs,” “Full ownership in our international small package express business in India will position UPS for its next phases of expansion in India and the region.”

UPS’s core focus in India is on helping large businesses and SME’s (small and medium enterprises) expand trade with customers in the global marketplace. And company officials said this effort to obtain full ownership in India, coupled with planned network upgrades, highlights its desire to strategically invest in high growth international markets and nations with expanding economies like India.

UPS also made note of various investments it has made into its India-based operations in recent years, including:

• acquiring new capabilities, technology and expertise and implementing new performance standards to increase its overall operational capacity
• rolling out a facility at Hyderabad to provide integrated services for small package, supply chain solutions and contract logistics, which offers greater efficiency and competitiveness to businesses.
• in April, UPS continued its investment strategy in India by enhancing its network with the opening of another integrated logistics facility in Ahmedabad. From this location customers are provided a 48-hour delivery timeline to markets in the US and Europe. This capability is especially attractive for businesses in Gujarat – a strategic choice given Gujarat’s contribution to a quarter of India’s goods exports

“This is another example of our revenue quality strategy specifically relating to high-growth markets,” said UPS CEO David Abney on the company’s earnings call earlier this week. “The unit helps Indian businesses, large and small, connect with global markets via the UPS network. India is one of the fastest-growing markets in the world with 2018 GDP growth forecast at 70%.”

Scott Price, UPS chief transformation officer, said on the call that UPS sees India as a great example of investing into its growth market imperative.

“It leverages the enormous power of our U.S. platform,” he said. “We're not number one outside the U.S. and we see that as an enormous opportunity. So, as we control our destiny now with 100% ownership of the India business, we'll continue to build out that market as a significant part of our growth moving forward.”