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May 23, 2008

Govt asks UPS to stay on

The Philippine government will ask United Parcel Service to retain some operations in the country after the US logistics giant announced it was relocating to southern China, AFP quoted President Gloria Arroyo's spokeswoman as saying Thursday.

UPS on Wednesday announced the planned transfer of its hub to a more centrally-located 180 million-dollar facility to be built at Shenzen airport.

It said the move would place UPS closer to the centre of the region's economic activity and would improve customer service by reducing transit times across Asia.

The announcement represents an investment blow to the Philippines, which also faces a possible exit by Intel Corp., the world's top chip maker, from its second offshore assembly operations centre in Asia.

Arroyo spokesman Lorelei Fajardo told reporters the airport authorities at Clark airport north of Manila, where UPS had built its 300 million-dollar intra-Asia hub in 2002, were in talks with the US firm's representatives to explore alternatives to its planned downsizing.

UPS said on Wednesday that it was "exploring placing alternative operations" at its old Clark hub, which it said would "continue to be a strategic location for UPS's multi-hub network in Asia."

Staff and flights would be reduced, company officials said, but they did not elaborate on the other alternatives.

Fajardo said the Clark International Airport Authority asked UPS to reorient the facility to provide "logistics and supply chain solutions patterned after its facilities in Louisville, Kentucky."

UPS and Clark "are contemplating on a joint study on how to fast-track this in Clark as more international companies have taken a great interest in Clark as a service and logistics hub," the Arroyo aide said.

"This opens more possibilities for more flights not only from the UPS fleet but from other commercial carriers, both full freighters and combination passenger-cargo carriers," she added.

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