UNITED Parcel Service Inc started construction yesterday on a major air cargo hub at Shanghai Pudong International Airport to connect China to the express delivery giant's global network.

The 96,000-square-meter center, the first such facility by a US cargo carrier in China, is scheduled to go into operation next year. By the time it's finished, the facility may even be larger than the current design because of growing demand for freight transport, said Mike Eskew, chairman and chief executive officer of UPS, before the groundbreaking ceremony.

"The opening of this hub will ensure we are well-positioned to support the explosive growth in Asia's regional trade," Eskew said.

"Export volume growth in China for our second quarter this year was robust at more than 25 percent and at more than 20 percent year to date for the region."

The firm will increase its capacity by upsizing aircraft from its current MD-11s to Boeing 747-400s starting in February, he said.

The hub, located in the under-construction West Cargo Terminal area at the airport, is designed to have a sorting capacity of 17,000 pieces an hour by 2012. The initial investment is US$20 million.

The facility is the result of a Sino-US civil aviation accord in 2004 that pledged to open up the skies of both countries. Talks between UPS and the Shanghai Airport Authority began that year, but the deal wasn't finalized until early this year.

"We are still in talks with other world leading cargo transport companies and airlines on similar projects," said Wu Nianzu, chairman and president of the authority.

Pudong airport was sixth globally last year in cargo volume.