UPS - Earnings call transcript Q4 2024 | United Parcel Service, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Greg Alexander, and I will be your facilitator today. I would like to welcome everyone to the UPS Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Mr. PJ Guido, Investor Relations Officer. yours. is floor the Sir,

PJ Guido

Good morning. Earnings Fourth XXXX the welcome to Call. UPS Quarter and

today our our Joining our Carol are me Tomé, a additional team. CFO; CEO; few members leadership of executive and Dykes, Brian

our we subject in the comments make described to federal future operating the securities performance I some our within Form address and risks Exchange and Investor are to and of the file forward-looking we'll are furnish which to you other or Relations and or today remind Commission. filed, Before from we UPS that company. SEC. the XXXX begin, our reports are of on when uncertainties, XX-K laws and statements the are available These website These statements the want with expectations results reports, Securities for

basis. This change have Investor posted me segments. Domestic business weight to not Domestic USPS moved our Now change allocations structure this that with website. the Solutions made on reporting web of Effective management is align cargo transacts to with a and from the results us intercompany UPS let piece piece U.S. to and on we've the XXXX, this fourth a and revenue change have We been basis, not in Note that made piece quarter cost impacted by schedules Chain air Relations per a on change per between been are visible metrics reporting. simplify with share Supply as segment. the U.S. per USPS

non-GAAP to adjusted today stated Unless discussion otherwise, our refers results.

to $X.XX diluted $XXX million of Total mark-to-market The withdrawal GAAP $XX from multiemployer million. $XXX after-tax results impairment $XX plan after-tax is and charges cost pension share. quarter pension a transformation of per charge a these include the related items or $XX cost after-tax XXXX, noncash an total fourth million of asset after-tax the of million, for strategy after-tax million. of For

Additional is quarter appendix charges included that Relations are the details pension to in our UPS posted of Investor regarding presentation fourth earnings the year-end XXXX website.

to available materials. non-GAAP A Instructions] UPS available website. amounts Relations [Operator also These reconciliation Investor on adjusted financial today's of in the results materials webcast GAAP are is

the turn I'll Carol. now, over call to And

Carol Tomé

PJ, morning. and you, Thank good

performance I'll a with lot outlook, quarter review Then to with to and a of will have of We wrap provide XXXX our we'll cover the and questions. financial XXXX today. our moves taking our are an begin year our more for fourth we of drive prepared overview and detail I'll results. leave in remarks plenty performance. our up Brian full about time

as by peak. But first, and executed their hard efforts outstanding work let me start we for UPSers thanking another

were the the time our In for people, year enabled most seventh that's year and by they the industry the leader season, best, in row, a the holiday of in For peak important during our of of network, what face deliver the did do a our service customers. integrated customers. our for compressed on-time we agility period,

and X.X% fourth revenue increase quarter. XX.X% billion. in The to of from year, year, we was continued the we quarter Compared fourth third our positive results. to an last saw billion, quarter was to than Moving profit last into $X.X operating increased momentum better consolidated Operating the margin XX.X%. expected, $XX.X consolidated

quality over Domestic and for reflecting our strong XX% the Importantly, margin quarter, expense was operating revenue U.S. control. improved

in in $XX.X repurchases. the and last dividends revenue in billion profit full X.X%. operating of slightly consolidated was Consolidated to XXXX $XX.X cash and above and form returned year. generated share $X.X totaled billion the margin at We we share operations from consolidated year, $X.X billion, Looking was operating billion owners

U.S. the grow our year plans operational with financial big Access increase. a a Program, we of and finished last year. from and And XX% few let highlights. up was the basis our Digital volume, our DAP in points continue increase a SMB an for In Before generated XXXX, making XXXX, driver $X.X year-over-year. DAP, total of I SMBs revenue, share XX.X% billion in to of global discuss increase penetration our me XX U.S. XXXX, we

per discussed, moving we XX,XXX with equipped to a visibility In from scanning enhancing through for fleet, XX network of As network sensors, day we eliminating packaged our our initiative. XXXX, XX% Smart facility, package we manual cars represents a Smart package, million which customers. are our nearly sensing RFID scans and U.S.

the XX which we Network closures, resulting operational XXXX, And XX% in in deliver about of through permanently XX% more X did facilities Within while in our planned, continuing U.S. XX Future, Today, we our outstanding volume of to to closing XXXX. compared buildings. included completed operational customer than flows accelerated automated closures this and service.

in Earlier cold X cold serve opened we took Finally, in our cross-dock a chain. our facilities These December, to business further capabilities plans. growing in month, expand in this Germany. of we specializing completed company to Frigo-Trans, And state-of-the-art our logistics Italy actions further healthcare chain we logistics a support European healthcare acquisition market. and healthcare growth moves the European

launched X to people-led, on I of short at our In look like years. XXXX, last first, the about take Better strategy -- COVID-XX innovation-driven. elements: not talk June the back Customer hinged a pandemic, XXXX, X Bigger Before I'd we

virtuous important volume X.X, few markets on a For selling the a program attractive portfolio we first business and select including launching began freight focused healthcare optimization productivity we Transformation growing making volume including and few making SMBs and financially acquisitions. LTL cycle Further, from by our strategically optimizing we a on focused years, customers. and

delivered we economic with the XXXX, XXXX, the Teamsters. environment the In of struggling to was through challenges negotiation presented by strategy results much financial an due unexpected XXXX prolonged pandemic. world when our faced time due and unfavorable solid at with a the to line labor our challenges in financial a results From

the new growth. contract, next years. the wrapping labor positive the momentum third year our we XXXX, [ gained disruption, began to profit to operating we of returned the volume caused After costs volume, revenue quarter ] While several negotiation labor in our build and labor first regarding and for earnings and certainty of

and drive Sotheta our through focused known results leading an acquire into And productivity we integrator, closed delivering programs by And further Mexican Coyote to quality. entered we took similar our best-in-class to with to as revenue of business ], and peak logistics [ XXXX portfolio brokerage continue financial [ outstanding We a agreements Frigo-Trans. truckload selling target. ]. optimize our service We and actions out ahead on

challenges XXXX, But could we became that us in us wrapped clear X momentum. as we U.S., if up address didn't to specific facing the it we lose

relates U.S. it's Today, a package changing market growth the package small challenge to The characteristics. of dynamics market. slow first the with

The have second revenue of challenge customer. largest comes volume concentration we from our the and with

we action, will if returns. take Looking ahead, project we drive this no diminishing business

we The its USPS have we which third operating the model, at the is is puts In had risk. USPS with case, the challenge SurePost changing for service reliance our this believe product.

including So serving on customer we've quality to address want the segments taken serve and head all to best. we actions doubling X down challenges these revenue on, of

volume nutritive XX% First, with rightsize is we've of lowering we our our with With their half reached significant us in more an agreement and customer. will by a in volume for for XXXX. this, and for the the that than second by reduction largest our network retain us principle volume, customer

is by value we no SurePost the product. our this longer Second, use USPS be with can fundamental no certain for service financial with product, And on proposition. a our X, right impact effective to Service of this year, part our we in-sourcing material performance. January

our taken these incredibly of by with leaders, we've actions the productivity proud while changes, not done. I'm connection realized we're In

path calling Reimagined, should in We to processing UPS are These end, the put processes to than international. network we've U.S. launched but and billion work UPS from which hiring from and made, changes, all savings. Efficiency significant parts us profitable, to in of Reimagined multiyear Efficiency and is namely business there's tackle payments approximately more. $X a peak SMB market our this we're more our no agile that the already got changes healthcare, that differentiated drive operational will the BXB, coupled happen, do best reconfiguring foundational team and team. We've with better end initiatives to becoming some further make and the to have growing the practices down

deliver. will We

expected invested at actions will an by by result Brian fourth quarter the improvement in of And on U.S. these have we least As margins in capital. and in operating to return margin XXXX to expanded are of a XXXX, taking operating expect detail, these actions, Domestic XX%.

that, now you listening. And Brian. over the With call for I'll to turn thank

Brian Dykes

morning, good everyone. Thank Carol, and you,

in performance throughout in of excellent and quality management. our we better our quarter than The momentum that the quarter focus time on due the we year. positive financial was third the to fourth expected revenue cost continued busiest began Our

results business followed operational quarter market with morning, provide returns. cash year our for Then cover for X Starting a I'll shareowner I'll our expectations XXXX. areas. our and results, we our XXXX and of And fourth detail including more financial This the review on close making. the with are and by outlook I'll changes full

was profit to increase the X was of consolidated we last expansion. with in is XXXX. points and billion, compared operating last and In year. growth fourth in an XX.X% the in increase growth fourth shown the quarter, share In per fourth financial fourth these the increase was Consolidated generated an from quarter compared $XX.X and showed consolidated versus quarter, third quarter $X.X $X.XX, XXX Diluted of fourth the Starting the This quarter that in revenue, operating fourth the that year. of fourth operating of delivered on X we've XX.X%, an of billion metrics. the of revenue performance. earnings of consolidated years up XX.X% continuation margin we of quarter time our margin XXXX. And quarter quarter profit basis the a of first the momentum we to all X.X%

driven to Now management. strong cost and revenue performance. in by moving outstanding delivered Domestic quarter gains results, segment our fourth quality U.S.

services, our service over industry average customers throughout high During the XXXX demand to winning continue led by points the new peak. us our basis peak our competitor, on-time compressed closest drove for which XXX allowing season,

to U.S. total Ground ADV, air average average year-over-year, daily For the X.X% while volume was quarter, down daily average volume, XX.X%. or flat volume year. daily increased was last

largest volume third our surplus compared of SurePost power UPS Through grew ADV, decline quarter our from as by percentage customer, customers. XXX volume total and algorithm, resulted Within in the sequentially increased ADV, the from ground, SurePost high-tech by half Excluding of slightly matching healthcare being AR third ADV by the the to driven quarter, of total of from which a we points drivers. Redirect basis XXXX. delivered increased the demand

BXB quarter, daily average volume X% was the down total year-over-year. For

However, from including growth we healthcare saw customers, healthcare SMBs. BXB

slightly volume the made year-over-year volume. On our and average of daily side, was XX.X% BXC up up

December. in we customer grew of the of SMBs ADV by in growth XX growth U.S. XX.X% SMB strong we've from fourth in driven quarter, terms the quarter This saw up concentration which quarter, X.X% fourth highest years. total was mix, In made In fourth volume. double-digit seen customers, the

Domestic to For in generated $XX.X air U.S. revenue year, December due the of package to last of X.X% up small compared the billion, in increases strength and quarter, cargo.

mix surcharge points. around on XXX positive combined the base flipped per of points by piece The this year year-over-year, holiday basis Strong time from a was quarter, the basis per rate demand the basis per per product points. net revenue and revenue Breaking points. the year. rates of XX mix X.X% revenue revenue was improvement for growth growth fourth down the the of the rate piece customer by growth which the the per lighter quarter XXX piece growth first keep X.X% In improvement, piece with piece rate our up basis XXX decreased impact revenue this rate sequential increased weights components and rates third of increased

a drove basis the per fuel piece rate. growth decline XX Lastly, point revenue in

full we first was Turning a growth at to increased this lower Since our at X.X%. expense rate. labor lapped contractual first the end cost. quarter year of of Total July, union contract wage the the

XX.X%. increased over fact, X%. this rates quarters prior the by In union In average the increase fourth X year, wage the only of was quarter

did response our processed XX including the the the operational we we and fourth our fewer exceeded our We and Future By quarter XX of leveraging with and we target last small year, delivered Network completing equipment we rental amount insource million volume we increasing fourth as expenses other of as automation, changing excellent within technology of closures and hours, while declined our this transportation to network package Through tightly initial buildings. peak. hours delivering levels. X same through volume year, volume but it in the service. SurePost initiative, in during XX% Purchased by block air lowered manage quarter,

and expected a safety than better benefit drove our performance in was we Lastly, expense. casualty

to at X.X%. per and our practices Domestic basis operating compared quarter XXXX, XX% to technology and fourth just hold XX XX.X%, profit, increase increase margin billion leveraged cost $X.X piece, operating The peak a in the delivered the of Looking of proven points. we quarter fourth U.S. segment to the an year-over-year throughout the and was period, increase the

Moving to our International segment.

a daily for time the operating our positive and volume For revenue profit business average and in row, and year-over-year. X.X% second years daily performance first quarter grew all XX.X% daily ADV X.X% export increased expanded average up side, the regions International International was in compared growth. the in driven margin. Total delivering flipped on operating average X growth year, strong volume last Canada. volume International domestic And year-over-year to increased by with

countries level, third by Germany. And increased our last is export for our to growth country Asia export X.X% which market, largest in export export daily volume volume Germany, ADV, and XX consecutive at daily quarter. of average delivering And year. XX XX.X%, the average grew top led export compared Mexico up was the

In profit year-over-year. optimization $X.X the from increase operating International by was an quarter network management year fourth leverage ongoing in segment fourth International cost the XX.X%, growing billion, and generated XXX points was a year, up with regions billion, margin basis all the from driven XX.X% last an revenue in of quarter, $X.X positive International year-over-year. Operating X.X% efforts. increase our ago. was of Operating revenue

$XXX the million. forwarding in Revenue revenue Chain Supply $XXX impacted businesses was by Coyote In the billion. with to million, logistics the period. increased revenue $XXX our Moving million and in within reduction fourth from XXXX Solutions. quarter, $X.X Revenue decreased

of demand Looking up at fourth market Chain forwarding Supply XX.X%. And Asia. profit the generated revenue Solutions ocean continued grew of XX.X% key revenue drivers, million air margin in increase in which and an basis of million, million In by out operating was year. points was from strong logistics quarter, led by $XXX the XX of last $XX.X profit period fourth an quarter included operating down $XX year-over-year, same impact of the Coyote XXXX. Operating in to compared X.X%, the

through expense. Walking of interest rest had we income the statement, million of the $XXX

XX.X%, to Our $XX approximately tax fourth quarter million, for was pension and lower effective the due our items. rate was income discrete than our --

me let our Now on XXXX year results. comment full

the For and $X.X our to the operating XXXX, in We in follow $X.X turns. priorities. consolidated was X.XX generated operating invested ratio year, the profit operations capital XXXX. in billion, $X.X allocation slight debt-to-EBITDA We margin debt delivered was billion CapEx. the in $XX.X full matured from end We We of $X.X a billion X.X%. distributed billion year cash billion revenue And at dividends. increase during billion of We continue that year. a over our of and repaid $XX.X

Lastly, share $XXX XXXX. we completed in buybacks million in

Solutions billion was XX.X%. operating XXXX. $X delivered billion us Domestic operating the for billion which segments year, generated operating and Chain segment the profit the in International $X.X X%, was profit of Supply U.S. margin brings $X.X operating And and margin full was to was operating margin And in The X.X%. and operating profit

As described, already Execution a facing of taking set to are a agile will well actions together profitable address and head our challenges these Carol U.S. the actions we create on. underway, business more is and UPS. strategic

Let more provide doing. on we're me what detail

of up The them. start begun deliver largest we've so XX% the down the second than glide significantly customer this the the volume at reduce our The but will meaningfully by be levels will revenue of The is our principle change their faster of reached volume I'll was Xx initial and and speed a with by of accelerated customer between for XXXX. lower the significantly efforts to at down down year. volume already has more will with result half XXXX we an overall mix piece. be than improved in of it beginning XXXX, glide agreement what that decline step per the higher

share. higher-yielding and volume shifting deliberately are focus increasing our on our growing value We business and

overall customer revenue lead the term. near in Lower to from will volume levels lower dollars this

will strong to by us enterprise per to from half our shifting enable architecture we improvements tomorrow SMB customer delivered XXXX through the revenue However, that and continue second the our technology. expect leveraging in pricing mix in This grow XXXX. we of rate piece of base our customers and

Additionally, and best XX%, in of and market volume growing we healthcare for will will the of including BXB. we revenue to longer U.S. And for and SMB continue the momentum down SMBs, expect the the volume terms the double to take on term. SMB, of parts our us, in percent this year,

Now looking at costs.

hours we As will costs of in our allows new this our back [ close take and Network us capacity our with we labor. volume fixed included ] accelerate capacity are to levels. our And of to able of All initiative. aircraft to fleets our only vehicle associated XX% facts volume to bring we Future expected reconfiguration. and miles will not to out expect cut down, the volume, network the reduce the the reduce building, to up be we match of our rightsizing U.S. to The

We in bring capital faster. networks while capacity network quickly to automation the across further more will run also us will able be down decrease. requirements more efficient our less U.S. reconfigured network, to The a investing efficient getting to

in our first will our quarter call execution plan share details more earnings April. We on on

Now we turning with made to the changes SurePost.

us to brings and provide our value to which changes Efficiency to service ability overall made Reimagined control The we proposition. our an initiatives. delivering began better portfolio a of Offering As volume, SurePost. important economy a of of part X.X% average in and on increase January is implemented mid-January, our XXX% we X, our reliable SurePost me customers, rate greater product give we service the and point-to-point operational

created approximately to it all while efficiency end history, $X year Domestic margin to our from even us Pulling savings. expect by Lower end. in processes U.S. overall Reimagined, billion operating U.S. we Through approaching for opportunity largest quarter to to network XXXX deliver Efficiency of in the with increase expect operating we in redesigning volume the network we're and together, a full expand margin reconfiguration reconfigured undergoing every X%.

months, next our expect generate impact quarter upside to operating operating the in increase the potential of we we margin U.S. to improvement XX term. we see into the As XX% fourth by where and accelerate more over pace cost-out efforts XXXX, longer even of a the expect the margin

forecast compared increase consumer Global X% to expected X.X% quarter year-over-year for to macro, to expected is In turn Starting the of XXXX global after XXXX. GDP the XXXX. are for of around guidance industrial and Real is first Turning remain production both the U.S., S&P the with to global year-over-year. expected of growth, exports manufacturing negative quarters and to resilient. X positive

Moving to financial XXXX our outlook.

For the be expected approximately revenue approximately and is expected on billion operating margin consolidated basis, XX.X%. is full a $XX XXXX, year to to be

tariffs. guidance XXXX Our changes to trade potential for reflect any implications does in not significant global due

give me on a color little segments. let you Now the

Looking at U.S. Domestic.

As of full per revenue cargo we approximately offset to X.X%, revenue a we're taking, will partially year-over-year, air USPS about by strong and expected onboarded year reduction expected of X.X% result growth wrap X%, by the of an driven XXXX is business. ADV piece actions decline newly the

X.X%, being quarter XXX the revenue expected little XXX X%, operating increase fewer intended points to expect X accelerate declines we revenue expect and year-over-year. approximately a of despite expect Full year-over-year of points has expand to down volume to which by basis margin day operating approximately provide X% quarter, increase first an is basis to margin shape approximately the ADV progress we compared to first year. we throughout operating XXXX, nearly to We to the for year And compared and XXXX. be the as

to Moving International segment. the

in but mid-single-digit than lower surcharges year, years. expect we've with the seen We prior demand-related growth ADV throughout

lower X.X% around compared to the margin with XXXX For the expect approximately moderately first be same increase last operating to of at be margin looking we year-over-year expect XX.X%. to an demand-related And quarter, surcharges. we revenue year-over-year down year, period operating revenues the due year to and to flattish

quarter, full the and million revenue is billion SCS approximately the Solutions, the expected Chain decline be with related X.X%. due Operating to to digits first first $XX XXXX, to margin associated margin in revenue revenue in approximately year And to Coyote SCS due pressure quarter year. the we last business. purchase in from $XXX for innovations reduction to to Supply about transportation operating expect be low be And the to to costs in in mid-single our in is period mail same anticipated

the We first be quarter SCS XXXX. margin to operating expect the in lowest

half year. below For the modeling half a in $XXX expect in expense than in million line, total the back purposes, we with approximately little the more of

slide We in for of interest $XX expect be is higher due is million last pension. assets the in Relations year to available on webcast pension which webcast today's market the in of to deck on included you XXXX, impact year. million on more XXXX, a primarily our $XXX the to website. We pension appendix the provide expense UPS Investor deck than approximately full shifts detail rates The

expectations our the and to turn for balance let's cash Now sheet.

We expenditures expect of free to Capital cash approximately $X.X billion. including $X.X flow our $X.X about to contribution pension annual be are billion, billion. be expected

the Future we should network as less vehicles require U.S. the and Network of investment aircraft rightsize are we capital our base. accelerating initiative, our in While reconfigured

We are approval. Board in to billion pay XXXX, planning subject $X.X in to around dividends out

to rate we tax expect be buy We And expect regime our the as to $X the year current approximately the lastly, tax of expect billion full XX.X% back shares. for U.S. we corporate to remain. around

lot a today. covered We've

parts our quickly results that the momentum. best and moving stronger, that's The be end-to-end growing more will market UPS We an of are our agile value network. in the of even our to actions integrated profitable continue more

please With that, lines the questions. open operator, for

Operator

question today of from comes the line from Tom Your Wadewitz first UBS.

Thomas Wadewitz

that bit you're and confidence out against think to, enough, how out, that quickly So play fixed bit so of kind things improvement talking a I revenue see of drop on. lot to a the that in you're you we that change Amazon fair pretty margin that big as think you're equation more costs margin little -- of deleveraging to can bit Wanted from the a I talk network meaningful if can seeing we recognizing the could going cost that about got a pressure, get as more start how about? guess, of a opposed You of build with. to that just fixed the yes, seeing able

Carol Tomé

Tom, about high announcement. partnered we business. and talking happy but I'll maybe nearly Domestic to our it's But for We've the dilutive that profitable the hold Amazon to customer. do by in regard. is our margin just years, company been largest that. Amazon is Amazon Its start most XX customer U.S. very to not

up contract this Amazon Our with year. came

And time our so we to step it likely it's said back if reassess for will Because a moment no in relationship. returns. take result action, diminishing and we

number glide June on we the our company, and options of in and think volume than landed to So their we considered XXXX. by of commented that a of the different remarks we by with is as prepared for option our more us, what best down accelerate XX% is

out volume, As a the we'll you assets be down volume. there Amazon also the lot pointed and us But gives and gliding margin Tom, we are expansion resources, out, we've as of resources support explained. that glide which assets those that that

will turn out. I'll Brian, cost to it come so the Now can how explain you over

Brian Dykes

a the require said asset And needed reconfiguration you're But the bring the a base, going so intuition we fixed is network, stakeholders absolutely of Sure. to we buildings, announcement stakeholders. that your of can right this are the vehicles, you. in the Tom, make Thank this involved so engage we to that here. clearly, those with as before, And there's we lot that the give out how more already in And we that the the I our roll first mission. stakeholders here, have we're key think involved. new But frankly, on teams. a line engage on chance volume underway color call levels. going And we'll lot is the you a earnings that quarter quite to that all is once aircraft, it's do schedule the with with to

Carol Tomé

reason to rather one we XX because for X strand months months a sure wanted make than we didn't glide the that And over down cost.

will labor flex our with clearly, volume. costs Now

hours. goes volume up, As have we more

As have less volume comes down, hours. we

in think, can we because of So But have, that. of we with on? down We Nando, buildings proven the that's business. just did you operate service. comment part I Future, DNA we XXXX to XX the our that would how with of like we improved close buildings closed Network just

Nando Cesarone

Sure. will Tom, the have facilities Thanks. completely course, go of X know them this question, have we'll of number that live January been driving this And Future active Network And in partially just you or here, automated XXX year, facility. our projects, already comfort to up that XX of closed. run this just the year, you'll of shipments give through

So me our lot of confidence, a give confidence. lot that of gives a people

we So these ahead we're good feel moves, of and schedule. about

Operator

question Goldman from next Jordan Alliger Sachs. the of from comes line Your

Jordan Alliger

you little network SurePost in-house then -- the the Amazon network? the of touch business Just be some for to bit, to this SurePost this move And follow or in so? sort going of up that give replace side ready today on constitute post Maybe done is currently along things. network density? pulled maybe going of from the volume part at much in least can day some volume sense out is how assets designed infill into Can that, a to X some the all with had of bringing of the office to terms

Carol Tomé

Well, question. for Jordan, thanks the

a a building. on back We network, and our matching SurePost delivery are used for All our we've had Let's redirect for for been in that. And SurePost. lot sorted the our by -- to talk products through moment last-mile into engineering the the IT able through of SurePost people. fact of algorithms, delivery, USPS portion volumes

in was XX% the quarter, network. the SurePost delivered ground volume of fourth the in fact, In

to those were And was into there as well model. decision it into And very deterioration. we their Up changes, changing matter been had was service you network facility. service came as of service. going and USPS about insert simply the until to So of have think operating upstream the to of have it a injecting But this sorting network, USPS the in-source we a as of all to it all were the and know, year, last mile result is their we good. our I the delivered we by concerned

cost didn't for cost their increase of to that value to service, well going were the they time, us. same deteriorating as increased us. well, the proposition work At as an And

we I'm the a delivery the to we Interestingly, in XXX% determined done. stops car. aren't have December, we pleased Yes, insource of of have So middle few And we us. say SurePost we volume, very would gone more more per miles. for well driving which that that's

look very we impact the when all. have SurePost, to it's financial feel our that to business going a not insourcing at we material actually to impact So good at

But to Nando, a you swimmingly like from make add? GRI admit. an would perspective, going I will increase, well. did we Now operating it's

Nando Cesarone

Yes, sure.

Jordan, algorithm for helps match stop also shipments control certainly, us the this stop. for So we feet smooth target daily And of there's really to We've opportunities volume dispatch now regular or XXX our to employees. us to days. stops over multiple multiple our adjusted matching a as that

in terms very picture X to able resources the another, flatten versus of linear So day staffing for company. we're and the spiking that keep

to of -- to per Carol looks our Early just addition car services said, had at how hitting the and team, of forward. we optimize through exploring look sure In economy that, make we as the on now, overall can of line networks as index mileage as rail rail it different The that proud just ground across move good. ways well an performance leverage and we're continue service to as so how is course, service, because right the really country goods. slower we movements we're Packages to days, portfolio. they try the

Brian Dykes

of to because million the technology if prior think a one it just I thing to made as network relates question almost allowed in well Nando, matter investments because within I the us the the and think could I weeks. insource X.X that stops have we And add

testament as will the help to move we've the a also that the into created agility operators, it's testament network. think to a I forward reconfiguration with but we're And the that us undertaking. we that

some taken in other change There The is think not churn, into right, do with we've included I important that have might we for There this the that in some work account know that thing forecast. our and and service. could GRI that you some the are is customers be should expectations.

Operator

Vernon the from David Your from line of next question Bernstein. comes

David Vernon

for year? run the start we think sort margin here year at have the deleveraging of the get there for margin look of a we're outlook. is XX.X% the sense network to questions didn't would trying if about think that that to 'XX, you had -- the going lower on any you for what just Brian, of couple volume. of the I'm So come number with if be full of this guidance a you that sort ultimately to about and like have the When would the way growth level would adjusted on rate

talk lot small can Carol, the like years. the -- then, what just of are down. growth lack investors of of right down the organic what There's market guys about package picture in the a ex the for business. glide glide from I'm looks the around you concern or you And how next growth to thinking X about And sense organic trying in the a maybe get now outside the in growth

Carol Tomé

[indiscernible]. Happy to

Brian Dykes

Sure.

And first. the we've as go with into drawdown question year. margin fixed volume commensurate we the through the our the going take out I cost taking be built we don't is Dave, think why I to course So the forecast of are what

margin. through as also will improvement an accelerate see XX% go that you'll and into to And XXXX expect to we get as the we Now we XXXX. in said, as we go

mix, of a quarter. combination X%, go base step but you what's going relatively, be rev on, is think going take you of volume a that and the look also shown in in piece to mix, the we've significantly decline up first even discipline what's good the I will at continuation that though to product U.S., per going right? is back pricing the is And really important customer

for grow the, volume, XX%, where And we're as I profile non-nutritive for but unlocking forward would and margin relatively to to the areas move control our we us the push ability say, and in just we it most by as forward the not beyond taking it's important us. move really we

Carol Tomé

to will projected the We're really of we grow small in digits area And low be single market, Amazon, in the project growth algorithm, David, SMBs. on take the package share. on One to and share XXXX the is That's proud with performance on in to U.S. XXXX way one to We're just our up to total business going the aspect nearly take XX% growth. seen in SMB of beyond. XX% XX% and our of that XXXX in we've in XXXX. excluding growth,

or on also at we're it the really now customer is could it us what of in at through this capabilities. the We segment we focusing right look differentiate can through is a And look rest focused that logistics complex away competition. from

in better moving science We've of space replenishment from them tomorrow, us which with discounting, productivity. more XXXX we've service for through retailers in more deal pricing, SMBs? stores invested we How put bids the art store We through drive their the BXB which our invested store is also growing XX delivery We're potential helps did space. stores, architecture providing pricing of allow of pricing us and Because winning that into the to the across access with replenishment. less in created digital customer. system X,XXX to manager, platform. helping healthcare almost with growing into their into We're nation, time-definite a grow

growth to take margin market. had slow volume would the not slower Amazon a share in our in because we're So going be going growth we the margin market. we're But cap capping our to accelerated down not

So too. grow to opportunity now have grow margin, and we an

together map might you Now for the David. put

Brian Dykes

think of I important go to the you Coyote. billion that's look from got out $X.X moving absolutely with it 'XX. in revenue you've XX, decline related SCS because revenue, take the right. a the And of XX the associated Coyote to to if and business. about domestic you're really the of just at parts because we change in 'XX But There's at David, look lot how you it's

billion. billion, taking got differentiated the enterprise going draw actions and and us $X.X $X grow that which, our plug that that about it's to over And of are these then with market focused Look, share. revenue to going SMB, customer allow really we're capabilities in the Carol are right, going gap growth, is in largest down we've to said, to as

David Vernon

levels. as right way squeeze some you more take think fair in of that share to share, it could to service rates And one the not I here, Carol, broader Or to increases it? doing to and they're opportunity? if I that All think just office well, right. lowering think about the about is kind the of on Is the that which is raising post point your market

Carol Tomé

absolutely think way about that's I think the to it.

Operator

comes of from the next Your Stephanie line question Moore from Jefferies.

Joseph Lawrence Hafling

wanted for talked This I really final mile handing on off high the changed In could had you on returns? is Joe past, guys SurePost on the the and being for bringing maybe guess Moore. kind feel what's and Hafling how you bringing to that point about ROIC in-house that that and are guys. operating maybe volumes stick USPS. those now see comfortable still of those volumes and I you network you all Stephanie in

Carol Tomé

service. We on starts service. Well, first it ourselves with pride

We leading that you if can competitor. have service of any on-time don't And the value on proposition, you lose the deliver business.

to service. So we make then deliver we buck sure can wanted want make this on we that first But to too. a business,

you Nando, just operationalizing might we're So reemphasize insourcing. how the

Nando Cesarone

sure. Yes,

a So of and have was shipment, that to arrival. UPS past, shot to morning one really we'd only in the shipment the a match

to is Now we've as we those able many match can. got our through multiple to and days as technology days see

at now. XX% the And packages. around we last match. scheduled to looking that as we the in deliveries In plus UPS year, ground We're proximity already XXs start number refine continue I think fact, to

are entire of what terms to And we've company in results it see brings fullest I extent. got wins inefficiencies. would we want we dispatch In which week, spikes its staff staff the utilizing dispatch avoids we And therefore, any And to the smoothing the day the And don't just is the we technology own again, up one now. don't think best week. look, to X that which or for the bigger week, across to any smooth have. of of reality, need we ability mind right to the and

done they've our great putting being and efficient think network. that into a I job volume

Carol Tomé

Matt, you talk market. the about we might And are to priced how relative

Matthew Guffey

Yes.

was our ask look, mentioned, a one, service is and to we service. X.X% couple product with the that of our we just GRI, just Carol I'd SurePost the things. as a to that you of in So portfolio. made to we we full it align protect out is highlighted. value customers important Number But came sure remember most

also when our So our is buy our just buy residential, buy, they SurePost ground product. which customers don't the premium offering. They

we products ground both accordingly So to our will -- sensitive. value. price we these it's it less provide both to the the be, ground and were SurePost and reliability and that product is economy way But time an service the designed priced of and to residential customers,

Brian Dykes

in X assets want out, on the is I our just And of UPS. point to that things Joe, most of the we a lot the take pride getting of point, ROIC out

Carol Tomé

We do.

Brian Dykes

adding in as work can going not And base this volume. assets on which able our ROIC see from you you said, XXXX And into managing It be higher, focused are Nando we fits dispatch. into our we are see the capital to guidance. the CapEx forecast, the to driving And it for network. we are and

Carol Tomé

XXX basis on numbers return anticipate, points based just grow laid you will capital out that today, the invested about we've for year-on-year. We on our

Operator

Your next question comes from from America. the line of of Ken Bank Hoexter

Ken Hoexter

things you competitive talk about you such volumes, is you market? around think specialty competition for those I don't back the first But And revenues a Does amount had mean in they always if them why returns the you how at you I rely XX.X%. know time versus increasing we they expect stick know should do you've can you. final things from on maybe segments? Amazon different standpoint? year? as you that were an that I we what should qualify was about the full different this said Amazon year. gave you areas takes kind in as Can now moat guess a the your of a midyear with competition kind gave that this for pickups, as of of reason

Carol Tomé

Yes.

a win that glide areas They for accelerated them. can you we us for win handle and can't are those I of important perspective, our year, Amazon network, our note a XX.X% will it's a total down that a to of that as UPS revenue. customer have From finish on competitive for we the know, think up when remain things a made full So company they handle. today Amazon one-way and

business, help integrated more them them think vertically of for with vertically that's who think we're down. but and nutritive ignoring any some going their integrated that you them some provide the when they glide retailer because needs fashion you are, packages, as are, to a delivering things, when a Amazon, as reach as could that's help they of what we what AWS retailer accelerated

tell anticipating got working be Ken, they've you, I the volume. with control we taking some in result. This UPS ask. glide destiny. was But will was because to competitive them, This to of of not how this the a are this changes down course, catch environment our not We'll as was of accelerated on us. out their figure

Ken Hoexter

-- a Great. The facility Is I us the of shutdowns, were throw how get kind out? Maybe throw numbers that. follow-in. there talking if I on of update the consolidated you you can already pace could you how out. quick guess some started Nando, about you've of those can

Nando Cesarone

network the we half to I need and we've for to as the into before, lot going It's fair to of lay then as 'XX. quarter the first on lay mentioned first talk that us We're Ken, until and of stakeholders especially will out that in through it year, for accelerate the plan go related the you. a Yes. out that call. we'll got to you April, half say give we to But reconfiguration. second

Operator

comes Your line Rosa from the question from Citigroup. Ari of next

Ariel Rosa

concerned changes could from the of some color of of doesn't that a XX that of these TAM growth Carol, Maybe UPS within So and it's maybe about revenue such that morning? what about us lot you plays for market this how you underway. And years kind us could a are picture paint or healthcare decline how envision whether you I SMB areas, say, line experience see the specifically, X of hoping the perhaps of you I the growth future on role material lot now? areas. top a then UPS, those growth talked you people some give was think of or

Carol Tomé

think our for love to future very talk you bright. I I'd our future question. Thank about Yes. the because is

it differentiated into the value are but segments leaning that the doing network we're our capabilities. market of through We end-to-end

else of for market And grew think an no about about us started productivity opportunity us. into we so where for initiative for when which growth down Healthcare providing logistics are you complex in Think think about healthcare. has the The market the as segments benefit X%. has. management a customers. Think upstream a the grew such tagging, opportunity turned X.X%. that our bit RFID about UPS, We of future one is an and slowed market inventory XXXX. for healthcare The solutions

the for about that $XX to over year, And So addressable billion. We've the TAM, by XXXX. the healthcare revenue just market, our plans $XX.X billion billion. got in take $XX to complex is

you, $XX.X To billion that clinical and complex, $X.X billion $X we've for got break down we've got billion about we've in billion in noncomplex. got $X in

next clinical we the years. going are to complex over on the and over-index So several

years international also moving of opportunity Vietnam. a realized X ago, couple back they to think for weren't but differentiated that China opportunities, an now manufacturers moving strategy where plus they we exiting other were China, A locations China us. were we to is like on in these manufacturing As diversification

growth. growth, We XX% operations, we we lanes these expanded of ahead So we trade XX% got our in it. where see expanded operations and

opportunity diversification is international us. So another

that's that's It's company not company this company it's company So that's a This is a a its but is not growing. a down shrinking. that's customer, gliding shrinking. largest

going We're targets. operating some a to Now targets we March. laid margin ago the out year revenue operating targets margin and in hit

are We that. confident absolutely on

you there's get of the because give the part complex the differentiated where as We clarity a us, top for through growth premium logistics, is the and once to of UPS, plenty all we need will we But to which market. line. this ahead color we're revenue reset targets taking

Operator

Your next Wells from Fargo. Chris of question comes Wetherbee from the line

Christian Wetherbee

up Carol, maybe can last that I pick point. on

scenario some flattish I about is of won't a XXXX as And any guess, mix or one. of down multiyear the a time. question I this give us down you we sort period be can mean, that I an think up think maybe get here. But the of process, for important earnings margin glide a comfort as is we of in result the way I there

in can, grow in us talking you parameters? the you guess, in of more we're some guess out April. of through around I want can earnings more just what them walk other lay I important. And I words, detail XXXX, you help So directly, know if you are to of the maybe XXXX? guide here, can I magnitude think in some kind think for of sort I given about points But maybe

Carol Tomé

and can We in to night, do for And this to last can out in as I today's want that's end you I'm we do that any thoughtful the know we'll there of the way Brian, thoughtful call. out we share do so question. going time show need a to on to do do I to they're not a out that at about But and And is figure that of how to we can like going the right that I -- We you. now? TAMs, to fair question, we're don't for figure this color think time ask come year, come do first it a of way. you you out absolutely I'm need growing. that. this talked give you we'll maybe quarter, that

Brian Dykes

we'll going we I out out. look XXXX, volume, what as taking will And because XXXX we Yes. make absolutely is we're to plans while clear down both just the costs we have Yes. lay and sure like be to take want Chris, also draw that on

cost to improvement. Efficiency results agile program exciting savings organization. it much because starting We more about that that's a we to from $X see have through it. process And That's Reimagined drive an also us it's billion talked underway. We're going also in makes

operating last as So will quarter right? and we this basis call. to That's lay go points finish accelerate coming and we the we than going finished you better we'll on XXXX, almost year. that for will out as every with we every year, of XXX domestic year, will progress quarter, this We the expand we through in it of expand quarter margin into

Carol Tomé

profit We're growing dollars. profit growing And that's profit we're profit I growing We're dollars, shrinking not the just margin. the dollars. We're -- dollars. think not

Christian Wetherbee

in can well? as about And XXXX we that's something think

Carol Tomé

related to out cost cost. fixed the accelerate will we because the absolutely Yes,

Operator

question Scott the Group comes from Wolfe line next Your of Research. from

Scott Group

dilutive single or has a or that just low very this wondering, few margin. no margin this times the said you been would like, margin That's thing. first business mid-single-digit you I'm a digit Carol, business? to characterize as

right, But here. of impact if some backfill mix does we, to we're your the change need pricing that, discipline? in XX% about and that just any think I when get totally way I losing to the volume price, XX%, extent,

thing, contract a comes think last of but And lot, last then should we asking thing, business assume know you that few a when years I other again? do up I'm the this away goes just the XX% in

Carol Tomé

So I Think so. the don't returns. I'll part last about answer first. think

UPS that very Amazon Amazon. to it X,XXX do very, locations customers We store make Amazon return for have convenient very their for that packages. of We well

X a you companies. So place of will, our where there's a if -- between parity,

will it think don't all I away. So go

I think glide we're down. spot with accelerated this landing at the right

number, And that. you that perhaps want back profitability dilution. you at volume the I revenue if is extraordinarily account. the think you that? might the about add at look it think I'll you would could dilutive, of be talk This percentage and into me and and described, that inappropriate anything for help of the to to about we any it Brian, leave to the

Brian Dykes

level. discipline, new to also network a important and about point because I be want we're reconfiguring this And volume because clear Scott, asked the you I the is to really think pricing

growth we're we a will absolutely the saw that's piece have second discipline are the because in point quarter, pricing and that chasing The and in empty new order fill per going to key be going see. got adjust the great of pricing we've capacity. fourth to That we going per we continue into that of to volume keep and the shown really level. place, portion We in to capacity XXXX is a piece XXXX. to volume processes improvement not implemented, that's discipline rev And half extend in So revenue forward.

Scott Group

So think here? with X can reduce do capacity for the drop X you you volume

Brian Dykes

Yes.

Carol Tomé

Yes.

Operator

comes from question line Morgan Shanker next the Stanley. from Ravi of Your

Ravi Shanker

here. a Just few

Can now. of for quantify Because U.S. Amazon? think the are pretty what math stat I You Amazon volumes that's you of the Domestic here. a a percentage important quantified doing the couple times revenues

scaling Amazon you start And I return Do a on program did well? returns, see over an time think risk your also, in-house up that point trialing to to last the as year.

Brian Dykes

the let a U.S. about depending on a the the XX% if little what time I around the say and network, Ravi, there's our Matt market. return price. in and returns volume, XXXX, of think the solutions I'll the So But on in you is talk Look, the returns, would a lot on volume portfolio in of bit second.

with UPS Here's store. what grow growth know, I our returns continues to

We have footprint. great a

have a customer experience. about Matt, We bit talk you And little want been maybe to great how to that. adding a we've

Matthew Guffey

Yes.

on in in Carol physical very hit to in X,XXX the we to U.S. you think footprint the most I key proximity the United the overall close it. have States, stores is component. think When the just right, the about experience, access give us that consumers And very,

that. gives And is build Returns to in to do. hard us we on a capability reverse logistics continue this and

acquired as just box, example now for if added do that no though. which complements no Returns. better also Let label, have return UPS physical, a me -- the but experience This you do customers you We've you digital, also for give remember, drives can other much our one well. for which only and is experience we a you not because consumer, the the Happy

the we to we portfolio. to that returns and best-in-class add So continue have believe this

Carol Tomé

might Between average, day just 'XX, a I in down the per about the and the on and you year. million packages -- average the And dimensionalize year. and on per to down modeling. glide course, 'XX day different -- be the we XXX,XXX it's way help 'XX of 'XX, in glide per average between not per packages just but is and Between average, 'XX will average, X.XX 'XX an was

did as we fast what as before. Xx So

Operator

next Your line JPMorgan. comes the from Ossenbeck question Brian from of

Brian Ossenbeck

Just a here. couple follow-ups of

of you was big I'm network you encounter assuming, volume, -- the about know implications update a us I pretty peak Teamsters reach season? for the you us an the you with complications after, that during But big give impact speak April can with broader can terms talk season, to peaker change. in Sunday's sense assuming delivery and big SurePost? on more give that you what may peak Given can Amazon for can I'm a be about this in

Carol Tomé

So do we'll operate won't I as peak from other perspective, we like leases, suspect. would year. what just have do we'll to add? many like you peak other every like a But year. operate Nando, We we any

Nando Cesarone

with stretch variable So regarding peak, our costs. we network

of We'll We those and is required. temporary be not rent from equipment up A lot stuff aircraft. as us And pieces set that opportunity facilities. We'll an equipment. going volume won't clearly, trailers sort vendors. not to and settles, rent we'll need to lease for all of We So our that peak season. shippers to. that's the this and rent tractors

back built the we're for within variable hedge ourselves little to I so just So in. going that think that costs, pull we've all

Operator

Your comes from line Bascome next the Majors of Susquehanna. question from

Bascome Majors

than the and Nando, change I years think Carol more we've seen in prior X parcel the space the in XX. last

Carol Tomé

Yes. Yes.

Bascome Majors

we've to of roll drop When you sort the seen that there out landscape, on last shoes be we do you seismic competitors? one, and question of think your big cost of could thing changes Can with competitive more the XXXX, 'XX, picture structures, the here. number another -- to talk to Or that we the some shifts? big

competitive you an have win? regional players long-term do you that the Where think Can ground you ground And about already advantage? landscape. your win do or just more previous holistically FedEx win think advantage ground wins a Where a about Like bit longer dig and USPS term? competitors? the to economy talked economy landscape and where question on does about where bit in a talk UPS little

Carol Tomé

but 'XX, big on today that and 'XX much 'XX, question, lot little [ Well, a sheeting bit to to on think focusing our were a and ] comments picture in pretty to happy 'XX. we there's and

think don't broadly. drive is of world understand impact better for I amongst what industries a experience. drop. productivity I opportunity think customer is the generative and imagine is for we to and It's and us mean changing the It change productivity to an can of the big rate it certainly accelerating. shoe hard AI to fully

us put see I that. to disadvantage it at anyone? can competitive Would a

policy I that need necessarily that's good follows think we're and to be fact, be need but that ahead we companies In most tariffs of this trade aren't space, mindful in mindful to We changing. for trade.

I to could it So trade shoe but it's if there lanes. don't be be drop, may changing changing big lanes. know trade a

we world, So trade our Kong in of lanes the air expanding they're building in do largest know new we're and the hub out in Philippines. in Hong Asia. And

lanes, we're So may these take ready be however trade of changing to to they advantage come about. going

with There's But logistics, are because to improved opportunity churn for Perhaps a customers of throughout UPS it more never logistics here. year that seen capabilities since got our it's I like world. stickiness before. last our business, the big to shoe drop a been creates we in grow lot differentiated we've the than complex enabling that's

a do I from us stickiness puts competitive believe at of positioning So a perspective, point differentiation.

talk we perhaps have the might we take and have it on was that us. do examples. year, Brian, may gap to about But we problem economy an and In we give gap. me markets understand and when didn't we fill positioning. going competitor, for tear our to and revenue, this, where we we apart that come to the you how a more and need Now last a product X Europe back, addressable I'll and grow every trust competitive where can we're

pricing and they, train didn't our fast in So that, our Kate? track -- team, team team Europe, working our with IT they operating

Kathleen Gutmann

They're growing double digits.

Carol Tomé

to needed We weekend weekend, digits. What a on double did solution. we offer do Kate? Growing

Kathleen Gutmann

the major we regular the exceeding doing Well, built first now them and and targets just our especially it on the cost both in of it countries, do in mover in efficiencies in revenue side because Europe the into world. and of that Western around Canada Europe we better

Carol Tomé

to see we that we it. we fill, gap need do when So a

Operator

from question next from Stifel. comes Your line the Chan of Bruce

J. Bruce Chan

of your fairly very proactive maybe it's underway in because to of these some is encouraging think developments. in I X. I'll helpful assets market with very SPSF like strikes the initiative optimizing RFID some it phase the you're in on see and It changes focus that just here, looks me significant

in you would phase entire for comments And target time X great? car around any the the what's the line, maybe fleet? rollout the across that have So especially packaged be

Carol Tomé

that? would to So take you like Nando,

Nando Cesarone

Yes.

schedule So changes that can prepared to of a here plan, changes SurePost. as changes. we've Amazon dedicated and financial got our completely is full a team confidence have we changes we about schedule, execute course, talk linked we other execute the the to and That those to the with

discussion In their that stickiness opportunity pull office earlier, got big help environment, becomes tagging, really addition just customers excited technology RFID they back to the from packages, delivery if not also with want of Carol ever going what disconnect just especially and to because a but in to to we've mentioned which about. where it's real an really decision we're

Carol Tomé

rolled a perspective, stickiness of And We be can should out Matt, give year. from customer a couple this you examples.

Matthew Guffey

Yes. Yes.

in a commercial value connected to big to is this driver Nando space, has space. about When you really store or resonating what it's of some just through and efficiency our framed productivity we get us areas, high-tech the we we proposition really BXB you and proposition, these important in RFID, value very highlighted benefits because think some in a but and get well. retail this from do Carol industrial how typically think benefits. from win very, enabled it's So replenishment. is And But customer

she those to visibility brought inbound workforce that -- I already and Carol complements onboarded they can that because the deliver but packages love then a and them many we've commercial docks, United capability on this, what's you from would volume. It enterprise the her retailers allows inbound that States have also, and in really how location. perspective hitting it spread if their to their us it XX we again, highlighted to -- opening comments, large We retailers in RFID -- heard because and that over they

I is piece that we which last together it able delivery these are The would this to inbound to them and allows windows retailers when add on get flexibility. couple that, you

the And we're continue we RFID. the the great have have through on believe then retailers edge something visibility to grow. but capability to you our to here work of with you So physical just

Carol Tomé

It's So reduces win-win. improves It our it stocking. labor their hours. a

lean here around to the competitive into world. continue that look landscape we're we around of a And the in way. we'll big game So the ahead when

Operator

line next Brandon Barclays. from of Oglenski question Your comes the from

Brandon Oglenski

here Carol, one maybe quick two-part on capital. just a

maintenance the domestic you'd the right of you to sustainable? cut the thought now, I share, drastic business? from ago. is year Given that pretty it a CapEx And where you level be think level would you're right which a the that the be took rightsizing what network for Is this X.X,

is I guess dividend something your payments I million. to earnings, targeting closer you're of it's $X.X this billion, like approaching trailing anticipated prudent to year that billion share think especially same in looks context, payout going then repurchase when $XX when $X of XX% how And with ratio be

Carol Tomé

let So on allocation address the Brian, and the talk that, I'll shareowners. side, you capital about then I'll

Brian Dykes

Brandon, the and thanks question. down important is to and the see capital. Yes, we have very us, capital Sure. you brought Because for management

that fully the that's allow processed Now concert as think with reconfiguration, capacity. I us efficient will the network XX% funding to say up automated facilities, I plan, within take we to Network rationalize conventional And that along of are through CapEx significantly volume less as Future. in of going -- the with we

forward So we're and moving fully funding with it. we're that,

aircraft And able is we we're will with us vehicles, anticipating. and operate quite allow fewer drawdown tighten to what volume frankly, up fewer the to that's fewer are buildings. Where

you the be as base. we going capital forward, think think about managing I will

to where customer, were. in we of CapEx we before into allocating capital line kind automate, about going need we continue And we that's if to That's to kind thinking manage realistic. go also improve that as of where So a lot back you ROIC. manage with base capital is the we we're but depreciation were think it a as to of specific

Carol Tomé

from we're we 'XX. liquidity cash on prudent back will we Strong it's question liquidity tax And XXXX, capital. buy push about actually and high? back a that what to access have shares very generating position. to benefit I note important it in But that to maybe isn't payment did if XXXX and more 'XX. tax is we a that strong in into We payout 'XX think a your to about had too pay than your in with it you

From pension the noncash a it below-the-line of of because the we're note, dividend noncash targeting the expense, pace. And that payout as XX% at it's distorted its It's that. ratio than appears higher ignore as expense. however, we're payout to high isn't important perspective, pension and you earnings, if

dividend. So plenty of liquidity the to pay

compensation share dilutive is repurchases, an today the way thinking from about plans we're EPS are the And on our it perspective.

finance and the just don't slower I debt after-tax stock [indiscernible] Because the basically yield So stock. the trade a cost that? really about the it's cuts What why is, tax Brian and the dilution. $X yield billion because after protects the talked the debt, of with on we have than on the good

thinking repurchase. we're share of would So how that's what fund terms about in a we

PJ Guido

have we And time one more question. for Greg,

Operator

Okay. comes from line ISI. Jon That the from of Chappell question Evercore

Jonathan Chappell

SurePost. that understand to I going one. of Carol the X% highlighted as about business. of the RPP -- U.S. given market hearing of bit any overall strong big Domestic, growth mix kind for in you markets? share of Is kind some kind core of just more talked just of spirit core quick volume a impact there pricing the on I out that? the the which core there, organic some grow is [indiscernible] a seeing guess, challenges Brian, challenges in of and on a GRI for the Just additive little pressure to you of maintain and/or some obviously Are well. market, be We're

Carol Tomé

We pricing results had of rates our are strength quarter the holiday fourth base rates our of positive approach. our think I well as keep very surcharge. proved strong our on demand as

X.X% core for our We're to on of that. business going GRI XX% Our is XXXX. keep probably

you X% and go Brian? don't the break you RPP do it growth, can't Why down X/X, X/X, you, X/X, can that. So

Brian Dykes

right. That's

if and strong and grind, Carol's about exactly rational through I'll evolve, about let sexy on a how the discipline a looking pricing This that look, we key pricing rates. we're So we've it. we're there's spend also It's morning the elaborate right. from us And around performing. And where for -- how environment, going every it's seeing from, is get market X/X customers about how you but a I lot that helps think really the base about comes Matt nothing are and it, that. the you that. and smart second. of X do created getting at it we Monday

driven, when is you've that on SMB the customer you So the of that's X/X peak got right? said, to On we mix improvement. piece you've though, at focus Matt, other products, through X/X rates, there. anything? base win we -- premium got X/X And it, through and rev right, to won do allowing us on the pieces, our on peak as Carol which per went and the other you look SMBs, add want also is mix

Matthew Guffey

on step highlighted the focused complex. of premium leaned the Brian's One rigor point, the on what because just in value wins Carol and in X hit of our segment. points saw end-to-end behind practicing products a you that To is really think network, I the practices were lot and pricing, XX% are an important. is on premium that we in our continue in QX, QX that. discipline here, we'll interesting segment, we as that's and it our

just quarter, to we've to up came time we allows through to pricing now last which pricing which we've The signs tomorrow, allows about SMB, ability turn thing you which our can leverage we've us is manager, customize fourth speed, for deals, we $XX talked of manager, and you and highlight technology, with for deal been customer. is able about in deal the manager, them it's unique to of deal our look, XX% can the I to all talked architecture million, is would price the us

also flexibility our lot the us drive right align value our prices of So our a customers, it's there. to and costs given for but

Operator

turn I floor over back host, to your will Guido. the PJ Mr. now

PJ Guido

you, Thank and This a great Greg. our concludes you have joining for Thank call. day.

Operator

for Thank that conference you today. Teleconference. your using gentlemen, for and and Ladies participation for conclude your does AT&T

now may You disconnect.

United Parcel Service (UPS) 30 Jan 252024 Q4 Earnings call transcript