Carol Tomé, the CEO of UPS, says the shipping company saved billions by phasing down its relationship with Amazon and now turns its attention to increasing automation and healthcare logistics.
The company is raising its full-year guidance, reporting quarterly revenue of about $23 billion.
During the company’s earnings call, Tomé says UPS has completed its Amazon volume reduction plan, slashing around $4.5 billion in related costs.
“We eliminated approximately 2 million pieces per day of lower quality Amazon volume. We reconfigured and further automated our U S network for higher return opportunities,” the CEO said.
Instead, the company will focus on profitable areas like healthcare logistics.
“In the second quarter, we generated over $3 billion in healthcare revenue, achieving that milestone for the second consecutive quarter. We’re already the number one provider of complex healthcare logistics solutions in the world,” said Tomé, noting that the company is also investing in expanding its network.
“We have added 27 temperature-controlled cross-stock facilities to our network,” she added.
“These facilities are designed specifically for fast, precise transfers of complex healthcare products between air and ground services while maintaining strict temperature control.”
Along with expanding automation, AI, and digital tracking systems, UPS is expanding North American air freight services between the U.S. and Mexico.
“We’ve launched a dedicated team of over 300 specialists with deep expertise in the supply chain needs of automotive and industrial manufacturing customers,” said Tomé.
Fuel price volatility in the second quarter drove higher costs, but UPS says its surcharge system worked as planned, covering the jump in fuel expenses.
