Consultant Insight: UPS and FedEx boost operations in India

UPS and FedEx are investing in India as trade between the U.S. and India grows. Recently, UPS opened its second airport cargo-handling facility in India at Bengaluru Kempegowda International Airport (BLR). The 15,000-square-foot facility will connect south India's automotive, textile, defense and aerospace manufacturing hubs to parts of Asia, Europe and America, according to Deepak Shrivastava, UPS managing director for the Indian Subcontinent. [caption id="attachment_69752" align="alignright" width="371"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] UPS, which opened its first gateway in India at the Delhi airport (DEL) in 2020, and has operated freighter flights to DEL since 2019 , will fly 747-8 aircraft to BLR five times a week and operate six weekly Delhi (DEL) flights. Meanwhile, in May, UPS announced a joint venture with InterGlobe Enterprises , a travel and hospitality conglomerate. The joint venture, MOVIN, will service the Indian market with a portfolio of B2B domestic services, including day-definite, express and time-definite solutions. And FedEx Express in 2021 also announced a $100 million investment in India-based logistics and delivery provider Delhivery, supporting FedEx's strategy to serve shippers targeting the Indian market. Delhivery will focus on international export and import services to and from India, and sell FedEx Express international products and services in the India market as well as provide pick-up and delivery services across the country. FedEx plans also to transfer certain assets pertaining to its domestic business in India to Delhivery. "India is a strategic priority for FedEx," said Raj Subramaniam, FedEx president, CEO and COO , in a statement. "This strategic alliance will support our long-term vision to grow our India business and serve customers seeking to expand in or enter the Indian market, as well as provide opportunities to develop product and technology solutions together with Delhivery for the benefit of our customers." Delhivery covers 18,700 postal index number (PIN) codes in India and provides express parcel, less-than-truckload, full-truckload freight transportation and warehousing. It operates an extensive network that includes 24 automated sorting centers and 85 fulfillment centers. The company delivers 1.5 million packages a day, according to its website. India's trade on the rise India's merchandise exports are up 27% year over year to $235 billion during the first half of 2022. Imports are up 39.6% YoY to $361.1 billion. "India is emerging as a trusted trading partner and global firms are reducing their dependence only on China for their supplies and are diversifying business into other countries like India," The Federation of Indian Export Organizations Vice President Khalid Khan told a local Indian publication. The U.S. surpassed China to become India's top trading partner in the fiscal year 2021-2022. Bilateral trade between the U.S. and India stood at $119.42 billion compared with $80.51 billion in 2020-2021, according to India's commerce ministry. Exports to the U.S. increased 47.4% to $76.11 billion in 2020-2021, while imports rose 49.3% to $43.31 billion. Trade experts believe that increasing bilateral trade with the U.S. will continue in the coming years as New Delhi and Washington are engaged in further strengthening economic ties. "In the coming years, the bilateral trade between India and the U.S. will continue to grow,” Khan said. “India has joined a U.S.-led initiative to set up an Indo-Pacific Economic Framework (IPEF), and this move would help boost economic ties further.” Indeed, many airfreight stakeholders have been increasing their operations in the country to tap into cargo growth, including forwarder DB Schenker which launched a weekly charter route in January connecting BLR to Munich (MUC) and Chicago (RFD) using Qatar Airways-operated 777Fs. More recently in April, U.S.-based freight forwarder AIT Worldwide Logistics opened its first office in Mumbai , followed by Delhi.

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