UPS & SF Holding Joint Venture Receives Regulatory Approval In China

Today UPS (NYSE:UPS) and SF Holding (SZSE:002352), the parent company of SF Express, announced approval of their planned joint venture by China’s Ministry of Commerce (MOFCOM). The JV enables UPS and SF to collaborate on development and provision of international delivery services from, initially, China to the U.S. and, in the future, to other trade lanes. The JV approval is a positive development for international trade and allows the two leading companies to leverage their complementary networks, service portfolios, technologies and logistics expertise.

UPS is the world’s largest express delivery company and a leading global supply chain integrator. SF is a market leader in express delivery in China, with extensive China-wide network coverage, comprehensive service capabilities, and the highest brand recognition in the Chinese small package industry. The newly approved joint venture is a continuation of UPS and SF’s collaboration that began in 2015, when UPS Worldwide Express® service was made available at SF’s Heike retail stores in Shanghai and Shenzhen.

“We’re delighted to help the many customers in China who will now be in a position to trade more easily across borders and better compete on the global stage thanks to product offerings from the UPS and SF joint venture,” said Ross McCullough, President of UPS Asia Pacific. “UPS has an aggressive multi-year growth plan in China. Aligning our two networks will increase our market presence by connecting China’s consumers and manufacturers to the U.S. and around the world with logistics solutions that strengthen cross-border B2B and B2C capabilities. This JV is highly symbolic of UPS’s confidence in long-term growth opportunities in China.”

“The establishment of this joint venture boosts global expansion of Chinese enterprises beyond local borders,” said Alan Wong, Group Vice President of SF. “SF and UPS are able to maximise the strengths of both companies to continuously innovate and create more competitive products that deliver strong value for customers.”

The alignment of UPS’ and SF’s transportation networks provides customers with greater coverage, additional routing options, increased capacity, and more choice in transit times and service options.

With the joint venture approved, customers seeking an economical solution for less urgent shipments can opt for Global Reach Plus, the new joint venture deferred express product that features the full visibility and reliability of a premium express service. Customers are expected to gain:

Time-in-Transit Reliability with 5-7 business days deliveries jointly powered by UPS & SF’s combined networks

End-to-End Visibility: Visibility from door-to-door using SF’s tracking tool, integrated with UPS’s industry-leading technologies

Single Point of Contact for customer service via SF; shipment pick-up by SF at the origin & delivery by UPS at the destination

Flexibility: Late order cut-off time for shipment pick-ups, and multiple delivery options including the use of UPS My Choice® and UPS Access Point™ network

The joint venture supports these highly competitive joint service offerings on the China-to-US lane, with planned expansion to markets in the rest of the world. Both companies can now utilize their own assets to boost operational effectiveness and efficiency for businesses while aligning business processes in order to provide seamless customer care for all parties shipping out of China.