UPS to make RP its intra-Asia hub

US courier giant United Parcel Service (UPS) is investing $300 million in the country to build its intra-Asia hub at Clark Air Base, which will serve the Asia-Pacific region.

The world’s largest express carrier and package delivery company and the government are set to sign today a memorandum of understanding (MOU) and a letter of intent (LOI) on UPS’ plan to set up an operations hub in Clark.

Trade and Industry Secretary Manuel Roxas II said UPS will dedicate an initial five planes to the Philippine route, with each plane flying two flights a day.

"UPS had indicated that it would quickly increase the number of planes and flights," Roxas said, adding that incentives such as income tax holidays" are not that important to UPS because locating its hub in the Philippines will make the firm cost efficient."

By flying time, Clark is about 1.5 hours from Hong Kong, two from Taiwan and four from Singapore, Japan and South Korea.

Also, by locating in Clark, UPS will be entitled to incentives given by the Clark Development Corp. (CDC) which include tax and duty-free importation of machinery, equipment, raw materials, supplies and all other articles including finished goods. Locators in Clark do not have to pay local and national taxes.

UPS services more than 200 countries and territories and delivers more than 13 million packages every day. UPS began operations in the Philippines appointing Delbros Inc. as its service agent.

In April 1997, UPS and Delbros Inc. went into a joint venture and established UPS-Delbros International Express Ltd.

The firm’s other existing hubs in the Asia-Pacific region are located in Hong Kong, Singapore and Taiwan. By setting up in Clark, UPS will provide stiff competition to Federal Express (FedEx), another US-based transport company.

FedEx operates 12 aircraft out of Subic and the company announced plans recently to add eight more aircraft to service its Philippine hub.