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UPS Launches Air Freight Network

ATLANTA, June 15, 2006 —UPS (NYSE: UPS) today began operating its new air freight network in North America and Europe, expanding the range of services available to its customers.

The activation of the network, completed today in Europe and started in parts of the United States, caps a strategic decision by UPS to expand into the global air freight business to complement its worldwide small package operations. Activation of the network throughout North America will be completed by the end of the month.

“We believe that international air freight is a vibrant market and that in order to compete effectively, it’s important to have a strong North American air freight network with global connectivity,” said Mike Eskew, UPS chairman and CEO. “We are optimizing the capabilities of our airline — the ninth largest in the world — by combining heavy freight and small packages.”

UPS Supply Chain Solutions, the freight forwarding arm of UPS, will begin placing much of its air freight volume on UPS aircraft, increasing shipment efficiency and visibility for customers while better utilizing the company’s airline assets and lowering operational costs.

In Europe, UPS Supply Chain Solutions will manage, as a freight forwarder, premium air freight services for pan-European shipments and offer one-day service for more trans-Atlantic shipments through six daily UPS flights.

UPS has expanded its European air network and enhanced service on various lanes. UPS operates more than 50 gateways in Europe and more than 40 intra-Europe aircraft in its network. The main European air freight hub is located at UPS’s recently expanded small package hub in Cologne, Germany.

The North American expansion will increase the number of U.S. ZIP codes receiving morning air freight delivery by more than 55 percent and Canadian postal codes receiving morning air freight delivery by more than 45 percent. The North American network will reach 77 percent of the U.S. business population by the next business day while improving transit times for Economy service with complete U.S. major metro coverage in three-to-four days.

In North America, UPS Supply Chain Solutions will take greater advantage of the UPS air network through more than 100 existing aircraft, accommodating the Next Day, Second Day and Economy freight service needs of UPS Supply Chain Solutions customers. Thanks to the broad reach of the UPS air network, freight operations will be able to use 97 gateways in North America compared to the previous 43 operated by Menlo Worldwide Forwarding, a large air freight forwarding concern acquired by UPS in December 2004.

The new network includes five new freight handling facilities around the United States in addition to a new global freight hub in Louisville, Ky. The regional freight hubs are located in Columbia, S.C.; Rockford, Ill.; Ontario, Calif.; Philadelphia, and Dallas. They along with the new Worldport Freight Facility in Louisville will form the backbone of the North American network. Also, UPS is operating five additional air gateways in Peoria, Ill.; Tucson, Ariz.; Laredo, Texas, and Chihuahua and Ciudad Juarez in Mexico.

UPS Supply Chain Solutions will continue to handle the Asian shipping needs of its customers as it does today.

“UPS now offers the industry’s broadest range of transportation and supply chain services under one roof with the expansion of our North American and European air freight capabilities,” said Bob Stoffel, UPS senior vice president, Supply Chain Group. “We are expecting strong synergies by utilizing the UPS air network and we’ll be able to provide many of our freight customers with more service options and geographic reach.”

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.

EDITOR’S NOTE: “Peoria is a thriving hub for cargo activities. The Greater Peoria Airport Authority is very excited to have UPS in our community providing a level of global service to our customers”, said Ken Spirito, A.A.E., Director of Airports.

Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US 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 US Securities and Exchange Commission, which discussions are incorporated herein by reference.

Contact:
Stephen Boggs
phone: (678) 746-7021
or Mark Giuffre
phone: (502) 329-3060

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