UPS to Pay $100 Million to Gain Control of Chinese Routes

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PS Inc. said it would pay $100 million to take control of the operations of freight forwarder Sinotrans in 23 Chinese cities by the end of 2005.

UPS and Sinotrans have maintained a working relationship since UPS first entered the China market in 1988, the companies said in a statement. They said they would continue to work together in areas not covered under the deal, which was signed on Wednesday.

China has agreed to let foreign courier companies operate wholly owned international express mail businesses in the mainland from the end of next year as a condition of its membership in the World Trade Organization, the Associated Press reported.

UPS said it would take over facilities in Shanghai, Guangzhou, Shenzhen, Tianjin and Qingdao in January. UPS said the 23 new business centers would extend service to an additional 200 cities in China.

"This agreement opens a wealth of opportunity for UPS customers seeking to do business with China," said David Abney, president of UPS International.

UPS said its export volume in China more than doubled in the third quarter of this year compared with the same period of 2003.

UPS is ranked No. 1 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies.