UPS remains confident with its logistics strategy

UPS told investors last week that it would continue to invest in new technology and expanded facilities

By ·

Investment analysts greeted the news when UPS announced objectives for growing its revenue and profit over the next 3-to-5 years.

Jason Seidl, director of Equity Research – Rail, Trucking Air Freight & Logistics at Dahlman Rose & Co., noted that the company’s supply chain and freight business segment posted another strong quarter.

“Revenue increased 7 pecent to $2.32 billion, which was largely in line with our estimate,” he said.  “Operating profits climbed 41 percent on the 7 percent revenue growth, driven primarily by improvements in the Forwarding business unit, as a result of favorable rates and revenue management.”

UPS told investors last week that it would continue to invest in new technology and expanded facilities.

Diluted earnings per share are expected to grow 10 to 15 percent from 2011 to 2016, the company’s top executives told analysts and investors late last week.

Addressing analysts during the course of the Investor Conference, senior executives outlined expectations for performance of the U.S. Domestic, International and the Supply Chain segments. Additionally, the company announced major expansion plans for its European air hub in Cologne, Germany, increasing capacity by 65 percent.

“Our long-term outlook remains positive despite recent economic uncertainty,” said UPS Chairman and CEO Scott Davis. “UPS is well positioned to capture the opportunities presented by the mega trends shaping our industry.”

The Investor Conference, built around the theme “Stronger Than Ever…Positioned for Growth,” was held in Louisville in order to display the results of a multi-year, multi-billion-dollar investment program. Over the past six years, UPS has:

• Completed a $1 billion expansion of its high-tech UPS Worldport air hub.?
• Opened a new air freight hub and a Global Operations Center for the UPS Airlines. ?
• Began operations in a new Centennial ground hub.?
• Doubled the size of its supply chain and logistics campus.?
• Assembled the “youngest” fleet of aircraft in the cargo industry.
UPS Chief Financial Officer Kurt Kuehn summed up the conference by maintaining that UPS business model is “unique,” with a long-term sustainability plan in place.

“Our ever-expanding capabilities create a moat that separates us from our competitors and that will deliver superior returns to shareowners for years to come,” he said.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Global Logistics · Global Trade · Trade · All Topics
Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo