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HEAD OF UPS SEES 'NEW AGE OF COMMERCE' COMING

Cross-border traders face scary times, with fears of terrorism and epidemic illness lingering in the tense aftermath of war.

None of which can deter the juggernaut of global economic integration, according to the head of United Parcel Service.

Michael Eskew, chief executive of the world's largest package delivery company, said he sees "a new age of commerce," coming in which "it's easy to reach customers anywhere in the world."

Eskew brings that message to Buffalo next week as the keynote speaker at a dinner marking World Trade Week. The event organizer, trade group World Trade Center Buffalo Niagara, expects 600 to attend the event Wednesday at the Hyatt Regency.

As a border region, Buffalo-Niagara Falls has a high stake in international trade. Exports by area companies nearly doubled during the 1990s, to $2.2 billion a year by the end of the decade, according to the Commerce Department.

But recently, companies have been slower to extend their reach. "Expanding into new markets is really a long-term investment," said Holly Sinnott, president of the local trade group. "Companies are looking at how to balance that expense in a down economy."

In addition, SARS and security fears have led companies to cancel some planned trips, especially to Asia, she said.

However, the pullback is expected to be short-lived, as companies again look abroad to boost business.

"Everybody looks for opportunities to make sales or get more competitive with procurement," Sinnott said.

Around the world, the phenomenon of export growth is increasingly binding countries together, Eskew said, shrugging off fears that have dampened tourism and air travel. Despite global turmoil, Asian and Europe increased exports by double-digit rates in the first three months of the year, while U.S. exports grew 5 percent, he said.

In the U.S., imports outpace exports, creating a trade deficit of $125 billion in the first quarter, after totaling $436 billion in 2002.

Largely U.S.-focused, UPS is working to make its boxy brown trucks a workhorse of the global economy. Of its 13.3 million package deliveries a year, only about 1.2 billion cross an international border. But with the purchase of First International Bancorp in Hartford, Conn., in 2001, the company is offering trade financing products, such as letters of credit, to leverage its business in 200 countries.

"So many companies have always done business face to face," Eskew said. "Now they want to do business in Toronto or China, where they don't have those relationships." Intermediaries like UPS can step in to assure that orders will be shipped and payment made.

The challenge is "how to make (international trade) as ubiquitous and transparent as the Internet," he said.

The computer network is driving much globalization, as "consumer pull" exerts forces on companies, he said. Consumers "are finding what they want at the price they want, and pulling that through the pipeline." He made the remarks in a telephone interview previewing his speech.

To highlight the changes in its business focus, Atlanta-based UPS is dropping the bow-tied package from its logo -- but not changing its colors. The shade of brown on its 88,000 trucks was copied from Pullman rail cars in 1916 to convey professionalism and hide dirt.

Non-package business like supply management services brought in $693 million in the first quarter, 8 percent of UPS' total sales of $8.02 billion.

In Western New York, UPS acquired a Tonawanda trade services company called Fulfillment Systems International in 2001, adding to its supplier services unit. UPS also operates a package sorting center in Buffalo with about 1,000 jobs, its largest center in upstate New York.

Eskew's talk will cap a two-day trade event in Buffalo, including seminars and exhibitions of which UPS is a sponsor. World Trade Week, designated by the White House, is marked by exporting events around the country.

e-mail: fwilliams@buffnews.com

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