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UPS new CEO wants to shake things up !

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  • UPS new CEO wants to shake things up !

    UPS is more then small packages. This worldwide giant is a workhorse of profitability and innovation. I believe they intend on keeping their position as the number one provider of freight and package services by better customer service and improving delivery times.

    The Tomé Way
    Carol Tomé, the first CEO in UPS Inc.’s (NYSE:UPS) 113-year history to have never worked for the company, hosted her first analyst meeting on Thursday. When it ended an hour later, the universe of UPS stakeholders listening in knew that a fresh gale had blown through 55 Glenlake Parkway, its Atlanta headquarters.
    Tomé, 63, brought two distinct messages to the call: first, that UPS is a more impressive company than Tomé, who has spent 17 years on its board, had realized. Second, that things need to change for UPS to sustain profitable growth as its business fundamentally changes in the years to come. UPS needs to become “better, not bigger,” she stressed repeatedly.
    In technology, where UPS typically invests more than $1 billion a year, the company has gotten stuck in what Tomé called a “static business logic” environment. This has resulted in a lot of overhead expense, an overemphasis on reporting, and “looking through the rearview mirror to drive the company,” she told analysts.
    Todd Fowler, analyst for Keybanc Capital Markets, took notice. Tomé’s messaging, he wrote in a Thursday note, was “on the mark with respect to a greater focus on adequate pricing for services, improved efficiencies, streamlining operations and product lines, and perhaps most importantly, reducing capital spending while improving margins to improve returns.”
    Because 46% of its SMB customers believe that time-in-transit performance is a priority, Tomé authorized the pull-forward into 2020 of $750 million to improve delivery times and expand service levels. By October, UPS will reach 90% of the U.S. population in three days, and 75% of the country will have access to Saturday ground residential deliveries, she said.
    The SMB customer “values our end-to-end network and is willing to pay for it,” Tomé said. The revenue is of “better quality” than from other top-line sources and can be achieved without a heavy reliance on price increases, she said.
    https://www.freightwaves.com/news/the-tome-way
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