UPS announces "better, not bigger" new development strategy
Recently, at the Investor Day event, UPS announced its upgraded short-term environment and financial goals around the "better, not bigger" strategy.
United Parcel stated that the company will adhere to the development strategy of “customer first, people-oriented, and innovation-driven”, serve small and medium-sized enterprises, medical and health care and the international market well, meet the changing needs of customers, and maximize the interests of shareholders.
United Parcel also announced sustainable development goals. Its mid-term environmental sustainability goals for 2035 include reducing the carbon dioxide emissions of each package delivered by its global small package business (based on 2020); 100% of the company’s facilities are powered by renewable electricity; The sustainable fuel of the total fuel of the team reached 30%.
United Parcel also announced its financial performance forecast for 2023, which is expected to reach US$98 billion to US$102 billion. From 2021 to 2023, capital expenditures are expected to be approximately USD 13.5 billion to USD 14.5 billion.
The company’s chief financial officer Brian Newman said that the revenue target will be achieved mainly through US domestic growth and some international and supply chain growth. According to UPS, since last year, the company has been committed to improving service quality, strengthening ground transportation, expanding the scope of weekend operations and digital operations.
The global small parcel market is becoming one of the focus of UPS. United Parcel CEO Dome said that the global small parcel market is expected to grow by 10% annually by 2023, from 452 billion U.S. dollars in 2020 to 596 billion U.S. dollars. According to estimates by United Parcel, the compound annual growth rate of the domestic small parcel market in the United States is likely to increase from US$138 billion in 2020 to US$195 billion in 2023. It is estimated that the average daily volume (ADV) will increase from 74 million to 1.08. Billion pieces. By 2023, the short-distance delivery business in the United States (less than 300 miles between the origin and the destination) is expected to increase by 86%, from 27.8 million pieces per day in 2020 to 51.8 million pieces, and the long-distance delivery business volume is expected to increase An increase of 20%, from 35.8 million to 42.9 million in 2023.
According to the Wall Street Journal, Domé said that in order to meet the needs of e-commerce, UPS will develop same-day products in due course. In addition, the transportation of medical supplies will also become a source of revenue for the company. It is estimated that the compound annual growth rate will reach 12.3%, and it will contribute 10 billion U.S. dollars by 2023. To this end, the company has increased the construction of cold chain facilities around the world.
The international market will be one of the growth poles of UPS in the next few years. United Parcel said that at present, the company occupies a 17% share of the global small parcel market with 86 billion postal addresses, and it is expected to grow by 6% by 2023, accounting for 103 billion pieces. To this end, the company will improve transit timeliness, carry out asset-light expansion and digital customer service transformation. In particular, it will increase the time limit for cross-border shipments in Europe and Asia, including flights from Osaka, Japan to Shenzhen, China.
United Parcel revealed that asset-light expansion will mainly focus on 40 fast-growing markets in Asia, West Africa and Latin America. The company will seek joint venture partners and agents and external service providers to jointly develop the above-mentioned markets.