UPS announces Dubai venture, eyes Middle East growth

AFP: UPS has announced a partnership to provide logistics at the 2020 World’s Fair in Dubai, a venture it sees as a springboard to a bigger presence in the Middle East.

UPS expects to hire 1,000 people to work at “Expo 2020” and will manage more than 27,000 square meters of warehouse space. The event, the first world’s fair in the Middle East, will run from October 2020 through April 2021.

The shipping giant has been accelerating investment in emerging markets after determining in 2014 the company was “too much of an American brand,” said UPS international president Jim Barber. 

In 2016, revenues from US package deliveries were $38.3 billion, more than three times those of international package. 

UPS does not break out its financial statements by country, but chief executive David Abney said the Middle East is “much smaller” than Europe, which accounts for about 50 percent of the international business.

“The population is young, it’s rapidly growing” in the Middle East, Abney told AFP. “We look at emerging markets much more about the future potential than the present size.”

Abney said talks with United Arab Emirates officials were not significantly affected by recent political controversies, such as President Donald Trump’s proposed travel ban on six Muslim-majority countries that has drawn criticism for discriminating against Muslims.

“The travel ban never included Dubai and UAE, so that really wasn’t a consideration,” said Abney, who said the function of the World’s Fair is akin to the Olympics. More than 180 countries are expected to participate.

“It’s just not a political venue,” he said. “It’s much more of a goodwill event.”

But UPS will avoid direct ownership of assets in riskier parts of the Middle East in favor of joint ventures, Barber said.

“All of those geopolitical forces come into play,” Barber said.

“Our plan and strategy is to use great partnerships in the region,” he added. “Keep the investment at a level that is reasonable, so if things in the years to come don’t go in just the right way, that we’re not standing there with a heavy, heavy investment that doesn’t work for our shareholders.”