On the road to disruption

On the road to disruption

CEO David Abney leaded UPS into the new technological era and is now stepping down after 46 years with the company.

David Abney has led UPS as CEO since 2014, replacing Scott Davis who retired from the Sandy Springs, Georgia-based shipping company. Previously, Abney served as UPS Chief Operating Officer (COO) and as president of UPS International, where he oversaw several global acquisitions. But his UPS career began in 1974 when he was a 19-years-old college student. At that time, he worked as a part-time package loader, and the rest is history. Rung by rung, he climbed the corporate ladder until he became CEO.

Now, after 46 years with the company, he is stepping down from the role to be succeeded by board member Carol Tomé, marking the first time an outside hire has taken the executive role in the company’s 112-year-old history.

Before his retirement, Mr. Abney spoke to us about the constant efforts of UPS in looking towards the future.

UPS is the world’s largest package delivery company and a leading global provider of specialized transportation and logistics services. The company handles about 3 percent of the world’s GDP daily, moving goods in more than 220 countries and territories around the world. We talked with Abney, and he told us how the company has changed in the last few years.

“All companies, including UPS, have got to transform. They have to change as quickly as the new technologies. And it’s no good when a company progresses more slowly than its customers,” said Abney. “If someone is going to disrupt our business, it should be us,” he says. “We have the largest and most sophisticated logistics network”.

Growth opportunity 

UPS is actively looking for investment opportunities to boost its efficiency – not only in the United States, but all over the world.

“One opportunity is e-commerce and its rapid growth. The other is the global market that used to be concentrated on China and the United States. But now the market is much more expansive. We are focused on these global markets and the technology that allows us to serve them.”

“Minutes and miles mean money in our business,” Abney says. “We have now fully deployed ORION in the United States, and it has generated more than $400 million in annual cost savings and avoidance.”

For this reason, it’s crucial that UPS be ready to develop or adopt technology that strengthens its network. One good example is UPS’s proprietary navigation system ORION (On-Road Integrated Optimization and Navigation), which uses fleet telematics and advanced algorithms to gather and calculate countless amounts of data to provide UPS drivers with optimized routes.

Another example is UPS My Choice, a data-driven innovation that allows consumers to have online and mobile access to see their incoming UPS home deliveries. UPS My Choice also empowers customers to reroute shipments and adjust delivery locations and dates as needed.

The importance of people

One of the strongest engines for UPS growth is its people, and Abney takes a lot of pride in his team.

“In my years at UPS, I’ve seen the difference our people make,” he says. “We do our best to provide them with the right tools for the job. But it’s the people who make the difference.”

Top-notch training is crucial to UPS. The company is even using virtual reality to help train delivery drivers.

Commercial challenges

UPS is always concerned with the global economic outlook. Economists estimate global economic growth near 3 percent in 2017. If that pace were to slow significantly, “that would be a challenge for us,” says Abney.

“Some of the biggest challenges we face revolve around unforeseen changes to the economic assumptions used in our forecasts,” he says.

Others, Abney says, include high U.S. corporate taxes and restrictive government regulations. UPS supports rules that spur trade and accelerate the movement of goods across international borders.

Plans for the future

As we look to the future, we know we need to continue to focus on the biggest opportunities,” Abney says. “And one of these is expanding our network in emerging markets.”

A primary goal is to continue to update the network to integrate UPS with its customers’ businesses using data, the Internet of Things (IoT) and the latest technology that will allow a continued focus on the e-commerce opportunity.

“International growth has been one of our biggest opportunities of the past three years, and we just couldn’t be more pleased,” Abney says. “Since 2014, we’ve seen 11 consecutive quarters of double-digit operating profit growth in the international business.”

In the third quarter of 2017, UPS’s export product growth surged 19 percent, led by Europe and the Americas.


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