By Anna Prior
United Parcel Service Inc. on Friday named Chief Operating
Officer David Abney as its next chief executive, again promoting an
insider to its highest post.
Mr. Abney, who started with the shipping giant as a part-time
package loader in 1974, will succeed Scott Davis.
Mr. Davis, 62 years old, has served as UPS's chairman and CEO
since 2008 and will assume the role of non-executive chairman, the
company said.
Both moves are effective Sept. 1.
Mr. Abney, 58, held various operational positions at UPS prior
to his stint as operating chief, including president of UPS
International where he led the expansion of the company's global
logistics capabilities.
Meanwhile, Mr. Davis is a 29-year veteran of the company, and
UPS noted the company made significant improvements in its
logistics network during his tenure as CEO as UPS expanded. Mr.
Davis also presided over rapid growth in international operations
and supply chain and freight, the company said.
Since Mr. Davis took over the CEO post at the beginning of 2008,
the company's share price has risen 50%. Revenue, meanwhile,
increased to $55.4 billion in 2013 from $49.7 billion in 2007.
"As the chairman and CEO for the past nearly seven years, Scott
Davis has skillfully guided UPS through one of the most turbulent
global economic periods in history," said Duane Ackerman, a member
of the UPS board and chairman of the nominating and corporate
governance committee.
As CEO, Mr. Abney will be tasked with improving UPS's efficiency
as it looks to keep up with a boom in e-commerce.
Average daily package volume at UPS has grown 12% over the past
five years, partly thanks to online shopping, but that expansion
has also led to growing pains.
During the most recent holiday season, for instance, UPS was
unable to deliver some goods in time for Christmas, as a spike in
last-minute shopping overwhelmed its system.
The company in January outlined plans for preventing another
Christmas disaster that included investing in expanding some of its
hubs to handle more packages and working more closely with
customers to determine how many packages they'll expect to
ship.
Meanwhile, competition in the shipping industry is likely to
increase as a number of retailers like Amazon.com Inc. and Wal-Mart
Stores Inc. test their own delivery networks. FedEx Corp. likely
added fuel to that fire when it unveiled plans last month to change
the way it charges to ship bulky packages, effectively increasing
prices on more than a third of its U.S. ground shipments.
Instead of charging by weight alone, all FedEx ground packages
will be priced according to size, which boosts the priced for
delivering items as diverse as diapers, shoes and paper towels. The
change in pricing could dramatically affect either online shoppers
or retailers or both as one of the parties will have to swallow the
estimated hundreds of millions of dollars in extra shipping
costs.
Industry watchers are still waiting to see if UPS will match the
price increase.
UPS in April posted a lower first-quarter profit, pointing to
unusually harsh weather that increased its expenses and slowed its
revenue growth.
Write to Anna Prior at anna.prior@wsj.com
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