UPS announces transformation programme

A transformation programme at UPS is set to increase its earnings per share from $1 to $1.20 by 2022. The transformation program is to take place between this year and 2022 and is about operating cost reductions.

“Transformation will lift our earnings, as we generate higher-quality revenue and use technology to increase operating efficiency and enhance customer service,” said David Abney, chairman and chief executive officer.  “UPS is transforming from a position of strength.  We are implementing an enterprise-wide transformation that will enable and accelerate our enhanced business strategy.”

The transformation program at UPS is designed to leverage scale and institutionalise processes to enable the company to capture efficiency gains, reinvesting savings through realignment of talent and financial resources on priority growth areas outlined in its current business strategy. There are to be four strategic imperatives:

– Continued expansion of high-growth international markets

– Profitable expansion from B2B and B2C e-commerce. US industry package revenue is set to grow by 40% by 2022. Cross-border e-commerce revenue is set to grow by 28%.

– UPS also intends on further penetration of the healthcare and life sciences logistics market as healthcare moves away from hospitals and into homes

– The final strand is continued Capital investment in its global network at the same levels as previously announced. Between this year and next UPS is too bad between 350,000 to 400,000 pieces per hour of sortation capacity in the United States each year.

“Today nearly 50 percent of our nearly 35 million sorted packages per day are processed using our new more-automated facilities.  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,” said Abney. 

“Our transformation touches every part of the company,” Abney continued.  “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 shareowners. Our leadership team is collaborating to instil a continuous transformation culture and I am confident our plans will deliver higher levels of UPS profitability and shareowner returns.”