ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Interview

Thailand and Indonesia cargo traffic spikes amid trade war: UPS

Countries emerge as Asian growth leaders replacing Vietnam and Taiwan

A UPS logistics plane is parked at the company's hub in Shenzhen, China. (Photo courtesy of UPS)  

NEW YORK -- Thailand, Indonesia and Japan are the biggest growth markets in Asia for UPS, as supply chains quickly adapt to the U.S.-China trade war, a senior executive at the global logistics company said Wednesday.

In an interview with the Nikkei Asian Review, Chief Operating Officer Jim Barber said there is "no question" that cargo volume from China to the U.S. has significantly shrunk. "It is down for everyone, everywhere."

But with manufacturers adjusting their supply chains and moving production out of China to avoid tariffs, some markets have emerged as winners, he said.

"It is very clear to me that Thailand was the early beneficiary of some of the tariffs that were imposed in China. Our customers, many of whom had manufacturing facilities in Thailand, immediately could shift production there," Barber said. "We had a front-row seat to see how supply chains moved."

Widely considered an economic bellwether, UPS released second quarter earnings Tuesday that showed the revenue of its international business, outside the U.S., declined 2.7% year-on-year. The company cited "global macroeconomic pressure" for the decline, which marked a significant reversal from the 9.5% growth posted in the same period a year ago.

Operating profit, meanwhile, increased more than 7%, as the company benefited from its "flexible network and by targeting growth markets within the company's diverse revenue base," UPS said.

Thailand, Indonesia and Japan were the top three Asia growth markets in the second quarter, replacing previous leaders Vietnam and Taiwan.

"If you are a manufacturer that has a dual or more nodes in your manufacturing, you just shift to the other one, because it will take at least a couple of years to build a new plant and get the employees trained," Barber said. "Thailand and Indonesia were clearly two of those nodes."

Looking forward, Barber said, Vietnam and India are likely to emerge as long-term winners. "We are doing a lot of work in Vietnam. The other one is India. We are really anxious to grow our footprint and connect India differently in the next five to 10 years."

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more