Being a US-headquartered company, how are the global operations of UPS likely to be affected by the current economic slowdown in its home country?
The situation is still unfolding and therefore it would be unfair for me to comment on behalf of UPS until we are certain of the direction this will take. But UPS has been in business for 101 years and because of this it has experience of market downturns and upturns and the irregular performance of markets. We measure our business carefully and are in touch with our customer base. We ensure that we manage the business appropriately. It is also true that the financial situation in the US is likely to have an impact on the industry generally, but it is too early to estimate the magnitude of that impact.

The logistics market in the UAE has become more saturated as more local and international players have entered the industry. What competitive advantage do you have over other players?
UPS is part of local, regional and global markets where competition has always been a key element. Competition has led to more innovation and investment in value additions for our customers. We have streamlined our regional and global networks in order to provide customers with a one-stop complete supply chain solution for the movement of their goods. A customer has flexibility in terms of choosing which type of transport to use since we operate through various transportation modes. We also have the ability to introduce our clients to new markets that are part of our global network since we offer the same level of service wherever we operate.

Companies like yours are focusing on IT solutions as a way of retaining customers. What steps is UPS taking in this direction?
UPS globally invests $1 billion (Dh3.67bn) every year in improving information technology as the best way to add value to our services. We believe in visibility by giving people access to the movement of their packages. We inform the consignee about the status and delivery of goods. We believe IT solutions help to ensure reliability and any investment in this direction will help to broaden our customer base both locally and globally.

Do you have any immediate plans to expand your facilities given the increasing demand for logistics services in UAE?
We have a robust operation capable of handling the expansion of the customer base and the growth that will come from this market. Our current facilities and structures can handle good levels of growth from this market. However, we will be working on expanding our services.

We want to expand and improve our online service to allow more visibility since it is becoming more popular. This will help to increase our footprint in the market. We have also introduced import tariffs, where customers are able to learn about the import tariffs of any product in their countries and based on that we can negotiate the pricing for the consignment.

UPS announced 28 per cent growth in global revenues for its Q2. Do you see this being reflected in the UAE?
What we see in the UAE is a market that has been positively influenced from a growth perspective in a number of sectors, for example finance, free zones and construction. UPS sees growth from its small and medium-size customers and its global customers have entered this market. We have seen double-digit growth in our business here across all the products and we expect the same to happen over the next few years.

There has been a general outcry about shortage of qualified staff in the logistics industry, how has this affected your operations?
What the industry is facing is a lack of qualified people with a deep understanding of the industry's dynamics. The industry has outgrown the skills level and what is required at the moment is intensive training backed with incentives to help retain good staff.

The International Air Transport Association (Iata) has predicted a significant drop in air freight demand globally, does UPS share the same predictions?
I have not personally heard about those predictions, but the reality of the industry is such that while some markets are facing a crisis, others have positive elements, which helps to balance the outcomes. It is not correct to make predictions based on a single situation.

By Ashaba K Abdul Basti

© Emirates Business 24/7 2008

 

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