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Boosted by an unexpectedly strong end to a tumultuous year, United Parcel Service (UPS) chief executive Carol Tomé is making defensive moves to keep Amazon, regional delivery companies, and other rivals from stealing customers.
Tomé, the first outsider to lead the 114-year-old company, plans to personalize customer pricing and modernize systems like billing and claims to make it easier for customers to do business with the world’s largest parcel delivery firm.
“Every morning I wake up looking around corners to see who is trying to get a piece of our pie,” Tomé said in an interview with Reuters.
“It would take years, and lots and lots of capital to replicate our network – but little pieces of it, they could come after. So the question is, ‘How do we make sure that they don’t get that?'” she said.
Earlier on Tuesday, February 2, UPS posted a hefty rise in adjusted 4th quarter profit, resulting from a surge in pandemic-fueled deliveries of online purchases of holiday gifts and staples like food and furniture.
UPS shares were up 0.9% to $157.66 in afternoon trading, following a 5% jump at the open.
The winter holiday shipping crush at times pushed the Atlanta-based company’s network to its limits.
UPS tacked special surcharges on deliveries during the quarter’s peak season, when it was inundated with packages from Amazon and other online retailers – leading to an almost 8% increase in revenue per piece. Amazon, the company’s top customer, accounted for more than 13% of UPS’ business during the 4th quarter.
Revenue rose 21% to $24.9 billion, and 4th quarter adjusted net income increased more than 26% to $2.3 billion, or $2.66 per share. Analysts said that helped drive up revenue per package, helping to offset a continued rise in cost per package.
In December, UPS and FedEx Corporation started rush deliveries of COVID-19 vaccines to hospitals and health clinics as part of the US government’s Operation Warp Speed project, fueling continued strength in UPS’ specialty healthcare business. Tomé said that work would continue.
Tomé, who was a chief financial officer at Home Depot and a longtime UPS board member before taking over as CEO of UPS in June, declined to give revenue or earnings guidance – citing uncertainty around the COVID-19 vaccine rollout and the health of economies around the world.
“Until we get this pandemic under control, it’s a little bit like walking on Jello,” Tomé said. – Rappler.com
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