UPS announces new growth strategy for parcels and e-commerce

UPS has announced its new growth strategy for the business, looking to improve operational costs and boost earnings between now and 2022.

The company will focus on four “strategic imperatives”: the continued expansion of international markets, leveraging the explosive growth of cross-border e-commerce, making further headway into healthcare and life sciences logistics, and enhancing value for small and medium-sized businesses.

Revenue from parcel deliveries is estimated to grow 40% by 2022, from last year’s totals, while cross-border e-commerce volume is expected to increase by 28%.

The parcel delivery company plans to expand the sortation capacity of its US facilities by 350,000-400,000 pieces per hour each year in 2018, 2019 and 2020—around seven times the additional capacity that was added in 2017.

“Today nearly 50 percent of our nearly 35 million sorted packages per day are processed using our new more-automated facilities,” said David Abney, chairman and CEO of UPS. “When we complete this phase of our Global Smart Logistics Network enhancement by 2022, 100% of eligible volume in the U.S. will be sorted using these new more highly automated sites.

“Our transformation touches every part of the company,” he added. “Most important, we are implementing changes that strengthen the ongoing core earnings power of the company. The savings we achieve will be reinvested in the company and its people, and will be used to reward shareholders.

“Our leadership team is collaborating to instill a continuous transformation culture and I am confident our plans will deliver higher levels of UPS profitability and shareowner returns.”

Source: UPS