Hot Features
Premium
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
I can remember when UPS (NYSE:UPS) was what its acronym stands for: United Parcel Service. Its full name no longer adequately describes the company. It has become far more than a parcel service. The initials and stock symbol better describe the state of the UPS share price, especially this past year. In my humble opinion, those initials also describe where their share price is likely to continue to go.
Let me make it perfectly clear that I am not certified to make an recommendations beyond “Get out of your house if it is on fire.” I find UPS a fascinating company. It has grown far beyond what most of us imagine it to be and it is continuing to evolve to become the master of its domain.
On 30 November 2012 the UPS share price was $73.10. Its shares had been modestly higher than that only for five short periods between 2003 and 2007. The share price hovered just above $73.00 in the first quarter of 2011 and repeated the same in the first quarter of 2012 before pulling back to $71.57 on 12 August 2012. But once it hit $73.10 on 30 November 2012, it has never looked back, increasing steadily on the NYSE to close at $102.54 on 27 November, the day before the American Thanksgiving Holiday.
The thing that fascinates me most about UPS is that it is no longer just about parcel delivery. It does that and it does it well. But it’s not the planes in the air or the trucks on the ground. It about logistics. But, for large companies, it is much more that simple logistics. It is about being completely in charge of selected customers’ inbound supply chain and logistics. Its services to major hospitality industry brands extends even to precision management of the influx of furniture, fixtures and equipment during implementation of property improvement plans. Its latest partnership with MGM Grand Resorts is a sparkling example of how UPS is removing one of the most burdensome loads that the operations teams have to deal with.
The company has completely transformed itself to service an almost unlimited number of major businesses around the world. As intercontinental product sourcing and delivery continues to expand, the more important the services that UPS offers will become. In my many years of operations management I found that procurement and logistics management consumed close to 50% of the time spent on operational issues. By the end of the first decade of the new millennium logistic has become the singly most important issue on my desk. Failure to receive the correct components at the correct time could bumfuzzle an entire manufacturing facility, and it was evident to me that, unless something radical happened, the situation would only get worse.
UPS has become the solution to the problem. It’s industry leading innovations include the ability not only to resolve logistic problems, but to control a customer’s logistics so that those problems do not recur. That frees operational personnel – manufacturing, engineering, QC, purchasing, and warehousing to focus on driving and improving in-house efficiency.
UPS has seen their customers’ needs. They have seen the future. They have seen the future needs. Their service solutions will make their customers more successful and will, therefore, make UPS more valuable.
The NYSE is now open for the day, and in early trading, UPS is continuing its upward trek, hitting $102.97 at 10:32 am EST.
