Atlanta-based United Parcel Service Inc. is partnering with an Indian logistics provider to expand its presence in India.
UPS has entered into an agreement with the logistics arm of AFL Private Ltd., a large company with a significant footprint throughout the country.
UPS will set up field stocking locations, or FSLs, at 130 of AFL’s existing facilities. UPS offers services at these locations that help companies provide customer service and product maintenance more quickly.
For example, UPS might store spare parts and products for a high-tech or consumer electronics company at an FSL. When a product needs to be repaired or replaced, UPS can ship it directly to the customer, eliminating the need for interaction with the manufacturer.
This improves the speed of the service and cuts costs for the manufacturer, said Donna Barrett, a UPS spokeswoman.
Sometimes, certified UPS employees even do repairs for high-tech products like computers or cell phones. Ms. Barrett gave the example of Toshiba, the Japanese electronics manufacturer, which trains UPS technicians at the company’s main air hub in Louisville, Ky., to repair Toshiba laptops.
UPS ships the computers from the customer to its air hub, performs the repair and sends them back to the customer. Toshiba controls the quality but avoids the costs of repairs and stocking spare inventory.
“In their business model, it’s more cost-effective to do it this way,” said Ms. Barrett.
India’s market for this type of “contract logistics” could surpass North America’s in five years, which is why UPS is rapidly expanding there, said Brad Mitchell, president of UPS Logistics and Distribution.
As India’s economy grows, it’s important for multinational and local manufacturers especially in the technology sector to be able to respond quickly to customers’ needs there, he said in a news release.
UPS uses its expertise in this field, called “post-sales services,” as a selling tool to show companies the benefits of consolidating their third-party logistics operations with UPS, Ms. Barrett said.
In addition to expanding its FSL network in India, UPS is also establishing an Asia Service Parts Logistics Customer Support Center in Clark, Philippines, to meet the needs of customers who place orders through the FSLs.
Ms. Barrett said these operations fall under UPS’s supply chain solutions segment, which generated $8 billion out of the company’s $51.5 billion in revenues in 2008.
UPS is known more widely for its package delivery services, which account for the “vast majority” of the company’s revenues, according to Ms. Barrett.
Although growth has slowed during the worldwide economic downturn, small package delivery overseas remains one of UPS’s strongest segments, she said.