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UPS To Invest $12B To Expand Logistics Network

UPS plans to invest $12B to expand its logistics network across the U.S. 

The goal is to remain competitive in an environment where e-commerce players like Amazon are growing their own delivery businesses and cutting out the middleman.

Packages

The investment will include an additional $7B over the next three years to purchase new aircraft, ground fleet vehicles and the advancement of its technology platforms, Supply Chain Dive reports

"The growth in e-commerce, cross-border trade and the needs of our customers for specialized services are creating unprecedented demand for our domestic and international air services," UPS CEO David Abney said during the Q4 earnings call.

In its fourth-quarter earnings, the third-party logistics company reported a 16% increase in its supply chain and freight profits. While this could be in part attributed to the holiday season, its year-over-year results were also strong, coming in at 21% over the previous year, according to Supply Chain Dive.

The package delivery company credited the new tax law for freeing up capital to make the investment possible. 

“We applaud Congress and the president for taking bold action to boost the U.S. economy. The savings we’re realizing from tax reform will enable us to unlock significant resources across the organization,” Abney said.