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UPS Wins Tentative Go-Ahead for Expanded Access to China

DOT Decision Would Increase UPS Flights to China in 2006

WASHINGTON, D.C., Feb. 22, 2005 – The U.S. Department of Transportation today tentatively authorized UPS (NYSE:UPS) to expand its air operations to and from China.

The DOT Show Cause Order, granting UPS three additional frequencies to serve China, will provide significant opportunity for UPS to continue growing its business within the region while providing customers with services from general freight to express delivery.

UPS currently flies from the United States to China 12 times per week and will be expanding that number to 18 early this year. Today’s tentative decision grants UPS two new frequencies to Shanghai and one new frequency to Guangzhou, effective next year. The new frequencies will allow UPS to better serve customers by offering full seven-day-a-week service to Guangzhou and increasing capacity to Shanghai on the two busiest days of the week, Thursday and Saturday. The frequencies also mark an important step as UPS progresses toward establishing a regional air hub in Shanghai.

“The new flights will allow UPS to greatly enhance service to the benefit of customers globally,” said UPS Chairman and CEO Mike Eskew. “This provides an extraordinary opportunity for strengthening commercial supply chains that support growing international trade between the United States and China and throughout the world.”

“The express market in China has developed to the point that our customers have asked for service seven days a week connecting China to the world,” added Ken Torok, president, UPS Asia-Pacific. “This award will permit us to meet those customer demands in one of the world’s fastest growing markets.”

UPS successfully entered the China market in 1988 in partnership with China’s Sinotrans and then began direct air service in 2001. It has experienced double-digit growth in the U.S.-China market during each of the last three years. In 2004, UPS announced an agreement with Sinotrans to take direct control of UPS’s international express operations in China’s largest and most important cities by the end of 2005.

UPS currently serves more than 40 countries and territories in Asia. The company operates air hubs in Taipei, Hong Kong, Singapore and the Philippines and was the first express carrier to offer non-stop service from the United States to China. Any additional rights provided to UPS, including the establishment of a new hub in China, will complement UPS’s existing air network in the region.

UPS is the world’s largest package delivery company and a global leader in supply chain services, offering an extensive range of options for synchronizing the movement of goods, information and funds. Headquartered in Atlanta, Ga., UPS serves more than 200 countries and territories worldwide. UPS’s stock trades on the New York Stock Exchange (UPS), and the company can be found on the Web at UPS.com.

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Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements, including statements regarding the intent, belief or current expectations of UPS and its management regarding the company's strategic directions, prospects and future results, involve certain risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, governmental regulations, our competitive environment, strikes, work stoppages and slowdowns, increases in aviation and motor fuel prices, cyclical and seasonal fluctuations in our operating results, and other risks discussed in the company's Form 10-K and other filings with the Securities and Exchange Commission, which discussions are incorporated.

• David Bolger
  202-675-3381