UPS sets up JV in Middle East, Turkey, and Central Asia

ATLANTA—Earlier today, UPS announced it is embarking on a Dubai-based joint venture geared to expand its express package, freight forwarding, and contract logistics services throughout the Middle East, Turkey, and parts of Central Asia.

 

UPS officials said that under the terms of this joint venture, UPS will have a majority stake of it and will acquire the small package operations of its current service agent in Turkey, Unsped Paket Servisi San ve Ticaret A.S. for an undisclosed sum. UPS added that the JV will be led by Unsped CEO Haluk Undeger, whom will own a minority share of the JV and has led Unsped’s Turkey-based operations since 1988 and has become UPS’s largest service contractor in that time.

 

“What is different about this effort is that it…covers a wide geography of 21 countries,” said Susan Rosenberg, UPS spokesperson, in an interview. “In the past, we have had JV’s or authorized service contractors or agents on a country by country basis. We still have those same relationships with existing JV partners in places like Bahrain and the United Arab Emirates [among other regions], and we still have agents and service contractors in the other countries.

 

In terms of services this JV will provide for shippers, Rosenberg explained it varies depending on locale. In some cases, she said, it might just be import/export services that includes domestic express services across a certain country that can change on an as-needed basis.  

 

But the biggest change with this effort is the opportunity to focus more on this larger geographic service footprint as a transportation bridge, with near-sourcing locations and the ability to move freight from Asia that will be going in and out of the Middle East, Turkey, and Central Asia, coupled with the growth of the oil and natural gas sectors coming out of some of the former Soviet Republic’s in Central Asia, as well as the Middle East.

 

“There are a lot of intra-movements going on in this geography that we can service with this JV,” said Rosenberg.

 

Rosenberg declined to disclose a specific figure for how many shippers UPS will serve with this JV, but she did say that UPS is looking to grow and sees opportunities in these areas, with the company already having business moving in and out of these areas.

 

The growth of UPS through Unsped as an authorized service contractor in Turkey was a main driver for this JV, according to Rosenberg. Dialogue between the parties focusing on how to replicate and use best practices and leverage relationships and understanding of each other led to this development, she said.

“This emerging area covers trade…where UPS is experiencing increased demand,” said Dan Brutto, president of UPS International, in a statement.  “We’re tapping the business acumen Haluk Undeger has shown over the past 20 years in his relationship with UPS. This joint venture will spearhead growth among our other service agents and operations in these countries. This part of the world has become a transportation bridge and ideal near-sourcing location for Europe, Russia and Asia.”

 

In January, UPS rolled out domestic express pickup and delivery services in 16 countries across Europe, Asia, Africa, the Middle East, and Latin America, including Algeria, Argentina, Chile, Cyprus, Czech Republic, Hungary, Kazakhstan, Kenya, Malta, Pakistan, Romania, Saudi Arabia, Serbia, South Africa, Ukraine and UAE.

 

Shippers in these countries, said UPS, will be able to consolidate all of their package delivery services with one carrier to eliminate multiple resources and potentially reduce expenses, too. And the company added shippers will be able to leverage UPS on the domestic and international through its IT platform for tracking, visibility, and billing processes, which will provide shippers with “door-to-door” visibility.

 

(Source: Global Logistics)