(Adds details, quotes from joint CEO, COO interview; updates
June 6 The incoming head of United Parcel
Service Inc said on Friday the world's largest parcel
delivery company will continue investing to build capacity in
emerging markets and to expand its services, especially in
healthcare, its fastest-growing segment after e-commerce.
Chief Operating Officer David Abney, 58, named on Friday to
succeed Chief Executive Scott Davis on Sept. 1, also said the
company would make acquisitions to build its capabilities
overseas, and didn't rule out large deals.
Expansion in emerging markets is "our number one priority,"
Abney said in a telephone interview.
Trade among emerging markets is growing rapidly and UPS
expects that eventually 95 percent of consumers will be outside
the United States.
"We're going to continue to focus on making those (emerging
market) investments," Abney said. "Growing internationally and
diversifying our customer base are extremely important to us."
Davis and Abney said Davis's retirement and succession
planning had been in the works for several years, signaling no
abrupt strategy changes for the Atlanta-based company, which
reported $55.4 billion in revenue last year.
Even as it builds international capacity, especially in Asia
and Latin America, the company's international package revenue
has remained steady at just over $12 billion since 2011. Capital
expenditures were about $2 billion last year.
Rising demand for drugs and medical devices will create a
large revenue opportunity for UPS, the executives said, as aging
populations and rising income fuel demand for home delivery of
healthcare products. Pharmacists at UPS's hub in Louisville,
Kentucky, for example, fill orders for pharmaceutical companies,
medical device makers and wholesalers.
"We're in the early innings on healthcare," said Davis.
Among other initiatives, UPS is investing in non-diesel
trucks and is working to reduce driving. All new
tractor-trailers purchased this year, for example, will run on
liquefied natural gas. UPS also has invested in propane-fueled
The company is not shopping for aircraft, having renewed its
fleet over the past few years, Abney said. As COO, Abney has
been running the company's global transportation network and has
led its investment in alternative fuel fleets.
Davis, who has been CEO and chairman since 2008, will retire
after about 28 years with UPS.
UPS shares were trading at $103.61 on the New York Stock
Exchange at midday on Friday, down a penny from Thursday's
close. They have gained about 22 percent in the past year,
compared with a 20 percent rise in the S&P 500 index.
(Reporting by Ankit Ajmera and Sagarika Jaisinghani in
Bangalore and Alwyn Scott in New York; Editing by Joyjeet Das
and Nick Zieminski)