UPS plans for Middle East growth

UPS is bullish on the potential growth of its business in the Middle East and is making significant investments. The company has been established in the United Arab Emirates since 1995 and recently expanded its contract logistics facility in Dubai’s Jebel Ali Free Zone to 159,000 square feet (14,771 square meters).

“We have seen that part of the world as a great opportunity for growth for a number of years,” Steve Flowers, president of UPS Freight Forwarding, says. “When you look at the growth rate projected through 2018, the expectations are 4.6 percent CAGR and a population growth projected at 4.9 percent. Those are significant reasons to provide service in this market.”

In addition to the expanded facility, Flowers says UPS has placed senior staff at a regional headquarters in Dubai that will oversee market opportunities in the Middle East and India.

Flowers says the new facility is designed to handle “high-turnover and high-value” products, including a 21,000-square-foot (2,333-square-meter) temperature-controlled facility to handle medical devices and pharmaceuticals. Dubai is a major transit point for these products coming from the U.S. and Europe and bound for Africa.

Another promising growth sector is the oil and gas industry. Products moved by air include small machinery parts, mechanical equipment and a lot of documents. Movement of luxury automobiles is another strong business.

Flowers says UPS hopes to expand in perishables out of Africa to Dubai with the idea of duplicating its thriving Latin America-to-Miami airlift.

“Perishables is a market opportunity we want to continue to explore,” Flowers says. “When you look at the Latin America perishables market to Miami, that’s a large piece of our business. We think there’s an opportunity to something similar in Dubai from Africa to the Middle East and to Europe.”

Transport of military goods into Afghanistan and Iraq was a significant business in the region for UPS. Now that the U.S. is winding down its presence in those regions, it continues to be active with flights going out of those countries.

“We were bringing merchandise over for a number of years and now we are involved in moving much of the equipment back,” Flowers says.

UPS flies a total of 16 B747 and MD11 “Browntail” flights into Dubai. These planes have 39 positions for palletized or containerized freight. The company also occasionally uses a B767. As demand warrants, UPS also contracts with carriers in the region such as Etihad Airways, Emirates and Qatar Airways.

“We have our own infrastructure, but we also buy from many of the Middle East-based airlines,” Flowers says. “We continue to look for opportunities to strengthen our network.”

In other developments in the region, UPS recently announced that it added a new express airfreight service, UPS Worldwide Express FreightSM, for urgent, time-sensitive and high-value international heavyweight shipments to and from the UAE. Customers in the UAE now can ship pallets more than 150 pounds (70 kilograms) as easily as packages exclusively within UPS’s global air network to 42 countries and territories.

Another measurement of the company’s growth in the region is its steady increase of field stocking locations. UPS has added an average of one per month over the past two years.