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UPS starts moving freight by boat from Asia

Wed, 09/15/2010 - 9:35am
SAMANTHA BOMKAMP - AP Transportation Writer - Associated Press

UPS is starting to move goods by ship in an effort to capture more of the booming international freight market that it already serves by air.

The move announced Wednesday underscores the importance the world's largest shipping company is placing on its international business, which has been key to sales growth while the U.S. business remains weak.

The new service is now available between the U.S. and Japan and will be extended to other parts of Asia over the next six months.

UPS, which is based in Atlanta and formally known as United Parcel Service Inc., said freight will move on the seas from Japan to the U.S. in 11 to 18 days.

For East coast destinations in the U.S., the service will cut 5 to 6 days of transit time off current service offered by competitors.

Overall, UPS aims to move freight up to 20 percent faster than current less-than-container-load companies do. Those companies take products from a number of manufacturers and consolidate them into a single load for shipment.

UPS will also offer a commitment to deliver on a specific day, which is relatively rare in the ocean freight industry. This is intended to lure customers who produce high-value goods now sent almost exclusively by air like iPhones and other electronics, prescription drugs, computerized auto parts and designer clothing.

The company's international package volume surged 24 percent in the most recent quarter, but the money it made per package rose about 2 percent because customers used cheaper modes of shipping.

The company's international shipments rose 15 percent in the quarter, led by shipments out of Asia, which rose more than 40 percent.

In the U.S., average daily package volume rose just 1 percent.

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