UPS acquires Romanian package agent, U.S. volumes tumble

UPS acquires Romanian package agent, U.S. volumes tumble UPS said Thursday it plans to acquire express delivery company Trans Courier Service, which has operated as its package service provider in Romania since 1990.
   The move highlights the increasing emphasis that the world’s largest package delivery company is placing on serving international markets as its growth curve in the mature U.S. market flattens.
   UPS domestic package volume declined in February across almost its entire customer base, reflecting a U.S. economy that has slowed to a crawl in recent months, Chief Financial Officer Kurt Kuehn said Wednesday at a company investor conference.
   The drop-off, which followed a “solid January,” means UPS will have difficulty achieving its first quarter earnings guidance of 94 cents to 98 cents per share, he said.
   The U.S. package segment accounts for more than half of UPS’s revenue and operating profit, but the integrated package and freight logistics provider’s long-term growth is in international markets. Kuehn said the international package delivery and supply chain segments remain on target for performance and annual earnings guidance remains unchanged at $4.30 to $4.50 per share.
   UPS officials said the Atlanta-based company is poised through development of its global networks and technology to take advantage of opportunities to facilitate cross-border trade that is projected to grow from $10 trillion in 2007 to more than $70 trillion by 2025.
   UPS said it plans to take full ownership of Trans Courier Service in the second quarter. UPS began operating in Romania in 1990 through Romtrans SA, the parent company that founded Trans Courier Service as a separate entity in 2000. UPS said that direct control of its package agent’s network would translate into improved service for its customers.
   “UPS will have the flexibility it needs to expand operations and to invest in infrastructure, technology, brand presence and employee development. And our customers will have the confidence of knowing we can stay ahead of demand in a country that’s growing GDP at almost three times the EU average,” said Wolfgang Flick, president of UPS Europe, in a statement.
   The World Bank forecasts that Romania, which joined the European Union last year, will enjoy economic growth of 5.9 percent in 2008.
   Bucharest-based TCS operates facilities in the capital city as well as in Timisoara and Constanta, and connects to the UPS international network with a daily flight between Bucharest and the UPS hub in Cologne, Germany.
   UPS said it has enjoyed solid growth in Romania over the years and in 2007 recorded a 10 percent gain in export volume growth compared to 2006.
   Other upcoming developments for UPS in 2008 include:
   ' Delivery of seven 747-400 jet freighters.
   ' Opening of a new air hub in Shanghai, China.
   ' Expansion of UPS-owned operations in China.
   ' Addition of express morning delivery to five more countries.
   ' Acceleration of delivery times on thousands of UPS freight lanes in the United States.
   ' Complete retirement of its small fleet of Boeing 727 jets. ' Eric Kulisch