Carol began her comments by highlighting some of UPS’s recent accomplishments such as implementing Our Fastest Ground Ever, expansions of weekend operations and the Digital Access Program, DEI training and more agile decision-making.
“What’s most inspiring to me is that UPSers did all of this while managing through COVID-19,” Carol said. “And for that I am so very proud of our team.”
Carol also highlighted that as of late May, UPS had delivered more than 300 million COVID-19 vaccine doses worldwide, with 99.9% on-time delivery.
Based on the better not bigger framework, UPS’s strategy – Customer First, People Led, Innovation Driven – reflects what matters most to customers, employees and stakeholders.
Customer First: The goal is to provide a frictionless, end-to-end customer experience by making every interaction across 16 customer journeys simple and helpful.
“When we listen to our customers and provide the capabilities that matter the most to them, they stay with us,” Carol said.
Results are measured by gains in Net Promoter Score, or NPS. The company has targeted a 2023 NPS score of 50 or higher.
The Digital Access Program – with nearly 1 million customer accounts already – will continue to be key in connecting UPS to small and medium-sized businesses. Plans include new partnerships and international expansion.
People Led: UPS is implementing measures to improve the employee experience and increase the likelihood an employee recommends UPS as a great place to work. The 2023 “likelihood to recommend” target is 80% or higher, up from a base of 51% globally.
“I’m happy to report early progress here. So far, we’ve seen a six percentage point improvement in this metric from one year ago,” Carol said.
Innovation Driven: UPS will focus on technology and productivity initiatives that leverage existing assets to create shareowner value.
“We are pushing ourselves in terms of reimagining our network design, adopting new technologies and sweating our assets,” Carol said. “Most importantly, we believe productivity should be a virtuous cycle, not a transformation event.”
Innovation Driven will be measured by a consistent increase in return on invested capital.
2023 financial targets
CFO Brian Newman shared UPS’s 2023 financial targets:
- Consolidated revenue ranging from approximately $98 billion to approximately $102 billion.
- Consolidated adjusted* operating margin ranging from approximately 12.7% to approximately 13.7%.
- Cumulative capital spending from 2021–2023 of approximately $13.5 billion to approximately $14.5 billion.
- Adjusted return on invested capital ranging from approximately 26% to approximately 29%.
“Our next generation profit initiative in the U.S. is at the heart of our efforts. This is an integrated, cross-functional program that will enhance customer experience, reduce overhead expense and drive our revenue-quality efforts,” Brian said. “We are creating a virtuous cycle of improvement, thus we will take a portion of our productivity and revenue-quality gains and put them back into the business to create new capabilities that will generate future financial benefits.”
* “Adjusted” amounts are non-GAAP financial measures.
UPS also announced new ESG targets that will support a cleaner environment and a healthier planet.
“I’m pleased to announce our pledge to be carbon neutral in all of our operations by 2050,” Carol said. “Our commitment takes a comprehensive approach across scope 1, 2 and 3 emissions.”
Interim 2035 environmental sustainability targets include:
- 50% reduction in CO2 per package delivered for our global small package operations (2020 base year).
- 100% of company facilities powered by renewable electricity.
- 30% of the fuel used in our global air fleet be sustainable aviation fuel.
“The next chapter of UPS is multi-faceted, focusing on what we are passionate about – moving our world forward by delivering what matters,” Carol said. “This is not just what we do but why we do it. Our purpose taps into our desire to serve our customers, inspire our people, care for our communities and live our values.”
Stay tuned for more coverage of future plans from investor day in the coming days and detail on the company’s new ESG targets in July.