Friday, November 21, 2014

UPS to spend $2B to expand infrastructure in Europe, Asia and the Americas

UPS said last week it would invest $2 billion over the next five years on expanding its global infrastructure in Europe, Asia and the Americas.

The package delivery giant held an investors’ meeting where it disclosed intentions to invest 4.5 to 5 percent of its annual revenue from 2015 to 2019 in building its network in the named regions, working to improve the profitability of its e-commerce deliveries.

The statement said from 2015, UPS intends to grow total revenue by 5-7 percent per year, and operating profit by 8-11 percent per year. It wants to increase its US domestic revenue by 5-6 percent every year through 2019, and operating profit by 8-10 percent annually.

"UPS is a strong company that has proven its ability to adapt," said UPS CEO David Abney. "The needs of our customers continue to change, and we’re changing with them by offering new and innovative solutions."

The delivery firm expects online shopping to account for 51 percent of its U.S. domestic volume by 2019, up from 46 percent this year.

UPS says its On-Road Integrated Optimization and Navigation (ORION) system should reduce an average of seven to eight miles traveled from daily driver routes. The company is attempting to make lightweight e-commerce packages more lucrative, boosting delivery density by using the new ORION route software and by pricing items by dimension as well as weight.

Technology-optimizing routes and improved planning would translate into lower costs per package, UPS said.

ORION is already in use by 22,000 UPS drivers and its full deployment should be complete by 2016.

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