On April 12, United Parcel Service (UPS) signed an agreement with the Shanghai Airport Authority to establish an international air hub at Shanghai Pudong International Airport with an initial investment of over US$20 million.

The hub, which is under construction and scheduled to open next year, will link all of China via Shanghai to UPS's international network with direct service to the Americas, Europe and Asia, UPS said.

Covering an area of 96,000 square meters, the hub will have 200 employees initially and over 1,000 when fully operational.

It will also connect the rest of China through a dedicated service operated by Yangtze River Express, a Chinese all-cargo airline.

The hub will be enhanced by the self-handling capability by UPS in ground handling, terminal operations and express handling, UPS said.

The deal benefits from the Sino-US Civil Aviation Accord of 2004 which pledges to open up the sky of the both countries and allowed UPS to enjoy more flexibility on flight schedules once it met the criteria for setting up an air hub in China.