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Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. And we've got another edition of Bloomberg Business Week Talks. Lucky for us, we've got David Abney. He's the chairman and CEO of UPS. Great to have you here on radio and television. David, glad to be here. So you know, it's so funny. I feel like every day there's a story about either Amazon trying to get packages, you know, faster to folks or FedEx. I'm just curious, is that what the business has kind of whittled down to it's just about getting things they're faster and cheaper. Time is certainly a big key now and uh, this new generation has just really gotten used to the warning things right away and we see that it's really driven uh, good characteristics in our industry. I mean the focus on next day here and having things that delivered the next day versus a deferred method. That really is where our specialty is is our focus. So we are really encourage But why do we see in those areas and how much do you have to sort of revise the strategy or revised sort of the roadmap in the near term to speed it up, and at what point do you have to really change things? And in the supply chain as it were, you know, the key is to listen to our customers and if you will listen, they'll tell you what they're needing and what they're looking for and uh and right now there are are certain things the reliability, the fact of the brand that ups the trust that people have in our in our brand, the fact that that they can depend on us on a day to day basis. Then those are the things that we're focused on. And as long as we keep aligned with our customers needs, we're going to be in great change. So FedEx saying seven days a week, every day, every month, every day of the year, it doesn't matter, not just holiday season. Does that make you, guys go back and have another strategy season strategy session. Back at GBS, you know, we constantly reviewed the needs of our customers and what we were hearing just recently was not only the Saturday ground that that our competitors also provide is we do, but the fact that we delivered to businesses on Saturday where they don't, and we pick up packages on Saturday that can actually be delivered Monday and uh and in over a hundred and seventy countries in the world, by picking up on Saturday, we can deliver on Monday. That's been our key. We are starting to hear a little more about the need for Sunday delivery, but you're not ready to do it. We are looking at it right now and uh and in our last contract that just recently got ratified, we have language that covers us for Saturday and Sunday. So we are pretty far down the path and you know, we will talk about it. We have more to review and strategically, how much do you worry about Amazon? Are they a friend of me? Or they a friend or the an enemy, or they a competitor? All of the above depends on the business. You know, this world has gotten way more complicated than having someone labeled as a competitor or a customer. It is oftentimes it's a combination of both. Then you just have to accept that the key is making sure that we have mutually beneficial relationships and as long as we do, then that's the path that that we're following. So I would not say that we worry about the Amazon. We respect them just like we respect others that maybe our competitors in certain parts of our business. But if we stay focused on doing our job and implementing our transformation, in carrying out our strategies, then we feel very comfortable in our position. We'll talk to us about that transformation plan, because I've been at world Port in Louisville and it's pretty fascinating just logistically what you guys are doing. And it's not just and I say just in quotation marks about getting packages from A to point B. But you're working with the health care sector and other sectors. Give us an idea, Yeah, as you transform the company, how much becomes more of those transformations versus what you're doing today? Will We are a hundred and twelve years old, so we've probably been through five major transformations in the history of our company. This is one of those. And the message we're giving tired people is this is continuous transformation. There's not a beginning, there's not an end. The way the business world is changing. This is a way of life. And we really believed that our people have accepted that. We focused in three particular areas, first of which is high quality of revenue growth. Second is increasing our efficiency using a lot of technology, and third is broadening our management team and our culture. Cultures are like anything else, they have to change with the times. The sense of urgency is much more making decisions is much more important now, and that's where we're focusing our leadership team. I gotta ask you the culture, because so much of UPS culture, like yourself, is someone who has grown up within the company, and many past CEOs have been that way. How much of that works today, how much of that doesn't, and that you've got to really bring in inside or rather outside views and outside individuals. That's right. I'm a big support of proportions from from within because I have benefited and so have a lot of other UPS. So real strength of our company the way we know our business. At the same time, with the way things are changing, we do need other expertise and other perspectives in point of points of view, and that's why of our twelve person management committee, I have brought three people in from the outside. I'm also promoting upsos at the same time, but we need that mix, that hybrid view that gives us the best of both worlds. And when you think about the company, sort of looking around the corner, it's part of your job as the chairman and the CEO. What's the biggest existential threat you think to ps that you really worry about the most, and the one that I would worry about the most is within our control is absolutely the pace of change. We are changing this company, and with changing it rapidly, especially compared to the past, the real hurdle those we've got to change ahead of our customers. And so that's the thing that we talk about all the time and that we focus on. And then of course there's always government policy issues that you worry about and you try to influence and express yourself. But really internally is that making decisions as quick as we need to make current policies US China trade. You guys have talked about how that I think in your latest earnings call is impacting forecasts for the industry. It's going on longer and longer than we all thought. What are your what you're thinking now about where it ends? Are we in some you know cold war that between the United States and China that goes on for a long time. China is going to be an important marketer, isn't market for you guys? John? Is important market to our customers, which makes it important to us, and we do support the policies to try to enforce and get China to live up to their w t O obligations and so fully supportive there. At the same time, the longer this does stretch out, the we have more customers that are exploring through the flexibility of our network supply change changes that once they make those changes, whether we have a trade deal or not, later on, those changes probably don't get reversed. So I think we still have time too, and we've really encouraged leaders on both sides of of the pond, so to speak, to find an agreement that works, because time is not our friend here. The longer the drugs up, the more supply chains are going to change. So tell me a little bit about growing up. Because you grew up in Mississippi, right, I give a little bit of a Southern tent to still tell me about your parents, your family, your life. I lived in a small town in Mississippi. Course that would be most of the test. But born in Cleveland, Mississippi, night Ohio. Everyone thinks and uh, and then grew up in Greenwood and it's really just small community playing in the neighborhood and uh and to me, I thought it was a big town because it was really all that I knew at the time. And uh, and I've really credit a lot of of my career later on to this upbringing, this sense of values that I was talked from a very early age. And Uh. In our neighborhood, you didn't worry just about your parents if you were misbehaving. I mean, everyone was authorized to let you know if you were going in the wrong direction. And I think you just learned a sense of accountability and learned a sense of value. So I wouldn't replace it for anything. Well, Marie and Tom, your parents right, tell me about them specifically. Yeah, my father was insurance salesman and uh, and I would say that I definitely got my determination from him, and he was always totally focused and and I think I learned that from him and the fact that early on he saw that I was about the most unmechanical child he had ever seen, and so he told me, so you don't. We're going to have to use your brain and you're gonna have to apply yourself because you're gonna be paying people to do a lot of things for you. Because it just was well, I always do wonder about when somebody is there something in your childhood that kind of determined where you were going to be later in life. And I'm not saying that, I don't know, did you think that you were going to be CEO but that might be a little crazy, but just that you wanted to run something, And I don't know if you thought about that when you were younger. You have to remember in my neighborhood, not only was a very small town, there were no CEOs in my and they certainly wouldn't have been in where I lived because we were on the lower end of the spectrum. So didn't think in terms of like that. What I did know from an early age, though, and it's a positive most of the time, is if someone tells me that I can't do something, it becomes my mission in life. So even things that are well intentioned, well, you know, really no one in our family has ever done anything like that that automatically triggered a reaction in me. And so I was the first to ten college and and graduate in college, and really the first one to move out to Mississippi. And I think it was always felt like that, even with well intentioned comments that sometimes people were telling me what I couldn't do, And there's some great stories. And your company shared with me though about that sometimes you didn't drive home and you slept on couches at college, you did some of that, you know, I would have to say that some of those stories have grown for the years. The sight that's right reality in college campuses, uh is. I worked it nice and then when I got off, we would we wouldn't start studying until midnight because I was against the rules, right, So then I'd stay three hours or so and then have to get up at eight, And so I would attend the class, a couple of classes. Then I would go to the union building and I would pull my shoes up, go to sleep on the couch. Next thing I know, thirty years later, I hear what he didn't have a place to stay, so he slept at the union build. Not quite that everybody's hearing it. He's setting the record straight, David Abney about that. So first job ups and I was a loader where they told me how I was going to load packages, and I did, but I also cut the grass and swapt the floors. I was really at the bottom of this totem pole and it was a job to get me through college. That's the way I looked at until I was nineteen and I had a center manager actually put his arm on my shoulder one day tell me what a great company UPS was what he had seen in me, and he thought that I could have a great career and that I really should consider. And I was going to school to be a history professor. I became a UPS employee for life. That is that the individual who was a mentor to you, because I knew that there was somebody I thought that was a manager from a from a small town at EPs. Yes, now that was a later person after I went into management. But this person. Uh. And you know, when you're nineteen, there's not a lot of people telling you how great you are. And they are there your parents and they have to sit and uh. And so that really and I think it's what makes our company special is that we can touch people for life if we take the time to get to know him and recognize him. And I thank the skuy for for the rest of my days. And uh and haven't seen him in thirty something years, but he really affected So here we are in en. You started at EPs in nine seventy four. You've been at EPs your whole professional life, I have. Did you ever think about going somewhere else? You know, I can't know. I'm sure there may have been a night that I'm going, what the heck? Right, but I don't remember that. It has been uh forty five years and uh and I'm telling you I look forward to it every day. It starts out as a job, it became a career, and then it becomes a way of life. It really does. And so you're talking to me about my career. But we have a lot of UPSs that have that similar and multiple jobs. You've been in New Jersey, you've been on the West Coast, you've been overseas. Correct, you know, I had our international operations, but I never actually but you have to remember I grew up in Mississippi. Then I was transferred to Tennessee. When I was transferred to New Jersey, which was totally out of my dad. You're going to hurt me right now. To me, it was like an international assignment just because UPS had identified that I needed exposure and I need to be taken out of my comfort zone. And uh, I would not be in the job I am today. If I had not gone to New Jersey, I found out there is a different way of life born in Brandon, New Jersey. I don't know if you know that. UM. I want to ask you what, UM, what do you think UPS is going to look like in a decade. It's very exciting to see where the company has gone. And then when you think a decade out, you can magnify anything I tell you, probably by two or three times, because that's how quick things are changing. But one of the biggest is that the consumer, for the first time in my lifetime, has got the power. It was always companies. It was always shippers, it was manufacturers, and then you bought the best thing that you could find based on what was provided. Today, it's all about the consus of the volume. It's about the volume, but it's through the Internet. The consumer has a voice, and whether it's through social networking or in other avenues, they make many of the decisions. So our company has had to migrate that it's not only the shipper, the person that pays us for the shipment, but it's also the end consumer that's our customer that's going to continue to progress. The other thing is from a global aspect. You know, five percent of the world's consumers live in the US, and global trade is going to continue to expand, and so our company is going to be much more global even than it is today. I'm curious what you think is the toughest long term strategy decision that you're working on right now. It is technology, and it's rapidly evolving technology. We can take the latest things that we can do now with technology and do things for our customers we couldn't even think about five years ago. The way that we can use predictive and prescriptive analytics and be able to solve problems before they even occur, which we couldn't do that in the past, and to be able to connect with our customers supply chains so much today. So technology is the biggest opportunity that we will have in that decade you're talking about. It could also be the biggest challenge, because if we don't embrace it, and if we don't apply it, someone will. We had to make sure its us. I want to ask you what competitor you do you most admire and why that. I have heard a lot of questions about competitors before that I have not heard the admirer. I'll tell you this, uh, I learned from our world around us. I believe that I don't have the view that any of our competitors are bad companies or bad people, you know. I think that now. I'm I'm a little bit of preferential. I prefer UPS over the others, but I think they're good companies. I think what separates us is that we put so much focus on the customer, and we have put so many of our investments in our global logistics network that I just think we're the best of the competitors. You're not going to give me a competitor that you how about an individual or a leader? You know, I would there are a lot of individuals that were out there I'll talk about I think a there's a recently retired person, uh from FEDOS, Mike Ducker, that I've always had a lot of respect for. We had international businesses at the same time. But also have to tell you that there's five hundred dollars and ups ors that I prefer. Even more so, if you want to know my favorite people and Nan Street, it's the five hundred thousand gups here that I am going through this journey with you are a good CEO. I've gone out with one of your drivers put on the brown uniform, and I know how hard they work. One last question, when you retire, are you really thinking about getting a master's degree? You know? Is that another another question? I think that was something at one time that I had thought about. One is I've been so busy and I'm having so much fun, i haven't really even thought about retirement. But right now I would say that when I do retire that my masters may very well be in these seven grandkids they have, and so they're going to get the most of my attention. So David had me. Obviously, your employers and your family very important to you. Nice to have you with us. Thank you very much,
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. And we've got another edition of Bloomberg Business Week Talks. Lucky for us, we've got David Abney. He's the chairman and CEO of UPS. Great to have you here on radio and television. David, glad to be here. So you know, it's so funny. I feel like every day there's a story about either Amazon trying to get packages, you know, faster to folks or FedEx. I'm just curious, is that what the business has kind of whittled down to it's just about getting things they're faster and cheaper. Time is certainly a big key now and uh, this new generation has just really gotten used to the warning things right away and we see that it's really driven uh, good characteristics in our industry. I mean the focus on next day here and having things that delivered the next day versus a deferred method. That really is where our specialty is is our focus. So we are really encourage But why do we see in those areas and how much do you have to sort of revise the strategy or revised sort of the roadmap in the near term to speed it up, and at what point do you have to really change things? And in the supply chain as it were, you know, the key is to listen to our customers and if you will listen, they'll tell you what they're needing and what they're looking for and uh and right now there are are certain things the reliability, the fact of the brand that ups the trust that people have in our in our brand, the fact that that they can depend on us on a day to day basis. Then those are the things that we're focused on. And as long as we keep aligned with our customers needs, we're going to be in great change. So FedEx saying seven days a week, every day, every month, every day of the year, it doesn't matter, not just holiday season. Does that make you, guys go back and have another strategy season strategy session. Back at GBS, you know, we constantly reviewed the needs of our customers and what we were hearing just recently was not only the Saturday ground that that our competitors also provide is we do, but the fact that we delivered to businesses on Saturday where they don't, and we pick up packages on Saturday that can actually be delivered Monday and uh and in over a hundred and seventy countries in the world, by picking up on Saturday, we can deliver on Monday. That's been our key. We are starting to hear a little more about the need for Sunday delivery, but you're not ready to do it. We are looking at it right now and uh and in our last contract that just recently got ratified, we have language that covers us for Saturday and Sunday. So we are pretty far down the path and you know, we will talk about it. We have more to review and strategically, how much do you worry about Amazon? Are they a friend of me? Or they a friend or the an enemy, or they a competitor? All of the above depends on the business. You know, this world has gotten way more complicated than having someone labeled as a competitor or a customer. It is oftentimes it's a combination of both. Then you just have to accept that the key is making sure that we have mutually beneficial relationships and as long as we do, then that's the path that that we're following. So I would not say that we worry about the Amazon. We respect them just like we respect others that maybe our competitors in certain parts of our business. But if we stay focused on doing our job and implementing our transformation, in carrying out our strategies, then we feel very comfortable in our position. We'll talk to us about that transformation plan, because I've been at world Port in Louisville and it's pretty fascinating just logistically what you guys are doing. And it's not just and I say just in quotation marks about getting packages from A to point B. But you're working with the health care sector and other sectors. Give us an idea, Yeah, as you transform the company, how much becomes more of those transformations versus what you're doing today? Will We are a hundred and twelve years old, so we've probably been through five major transformations in the history of our company. This is one of those. And the message we're giving tired people is this is continuous transformation. There's not a beginning, there's not an end. The way the business world is changing. This is a way of life. And we really believed that our people have accepted that. We focused in three particular areas, first of which is high quality of revenue growth. Second is increasing our efficiency using a lot of technology, and third is broadening our management team and our culture. Cultures are like anything else, they have to change with the times. The sense of urgency is much more making decisions is much more important now, and that's where we're focusing our leadership team. I gotta ask you the culture, because so much of UPS culture, like yourself, is someone who has grown up within the company, and many past CEOs have been that way. How much of that works today, how much of that doesn't, and that you've got to really bring in inside or rather outside views and outside individuals. That's right. I'm a big support of proportions from from within because I have benefited and so have a lot of other UPS. So real strength of our company the way we know our business. At the same time, with the way things are changing, we do need other expertise and other perspectives in point of points of view, and that's why of our twelve person management committee, I have brought three people in from the outside. I'm also promoting upsos at the same time, but we need that mix, that hybrid view that gives us the best of both worlds. And when you think about the company, sort of looking around the corner, it's part of your job as the chairman and the CEO. What's the biggest existential threat you think to ps that you really worry about the most, and the one that I would worry about the most is within our control is absolutely the pace of change. We are changing this company, and with changing it rapidly, especially compared to the past, the real hurdle those we've got to change ahead of our customers. And so that's the thing that we talk about all the time and that we focus on. And then of course there's always government policy issues that you worry about and you try to influence and express yourself. But really internally is that making decisions as quick as we need to make current policies US China trade. You guys have talked about how that I think in your latest earnings call is impacting forecasts for the industry. It's going on longer and longer than we all thought. What are your what you're thinking now about where it ends? Are we in some you know cold war that between the United States and China that goes on for a long time. China is going to be an important marketer, isn't market for you guys? John? Is important market to our customers, which makes it important to us, and we do support the policies to try to enforce and get China to live up to their w t O obligations and so fully supportive there. At the same time, the longer this does stretch out, the we have more customers that are exploring through the flexibility of our network supply change changes that once they make those changes, whether we have a trade deal or not, later on, those changes probably don't get reversed. So I think we still have time too, and we've really encouraged leaders on both sides of of the pond, so to speak, to find an agreement that works, because time is not our friend here. The longer the drugs up, the more supply chains are going to change. So tell me a little bit about growing up. Because you grew up in Mississippi, right, I give a little bit of a Southern tent to still tell me about your parents, your family, your life. I lived in a small town in Mississippi. Course that would be most of the test. But born in Cleveland, Mississippi, night Ohio. Everyone thinks and uh, and then grew up in Greenwood and it's really just small community playing in the neighborhood and uh and to me, I thought it was a big town because it was really all that I knew at the time. And uh, and I've really credit a lot of of my career later on to this upbringing, this sense of values that I was talked from a very early age. And Uh. In our neighborhood, you didn't worry just about your parents if you were misbehaving. I mean, everyone was authorized to let you know if you were going in the wrong direction. And I think you just learned a sense of accountability and learned a sense of value. So I wouldn't replace it for anything. Well, Marie and Tom, your parents right, tell me about them specifically. Yeah, my father was insurance salesman and uh, and I would say that I definitely got my determination from him, and he was always totally focused and and I think I learned that from him and the fact that early on he saw that I was about the most unmechanical child he had ever seen, and so he told me, so you don't. We're going to have to use your brain and you're gonna have to apply yourself because you're gonna be paying people to do a lot of things for you. Because it just was well, I always do wonder about when somebody is there something in your childhood that kind of determined where you were going to be later in life. And I'm not saying that, I don't know, did you think that you were going to be CEO but that might be a little crazy, but just that you wanted to run something, And I don't know if you thought about that when you were younger. You have to remember in my neighborhood, not only was a very small town, there were no CEOs in my and they certainly wouldn't have been in where I lived because we were on the lower end of the spectrum. So didn't think in terms of like that. What I did know from an early age, though, and it's a positive most of the time, is if someone tells me that I can't do something, it becomes my mission in life. So even things that are well intentioned, well, you know, really no one in our family has ever done anything like that that automatically triggered a reaction in me. And so I was the first to ten college and and graduate in college, and really the first one to move out to Mississippi. And I think it was always felt like that, even with well intentioned comments that sometimes people were telling me what I couldn't do, And there's some great stories. And your company shared with me though about that sometimes you didn't drive home and you slept on couches at college, you did some of that, you know, I would have to say that some of those stories have grown for the years. The sight that's right reality in college campuses, uh is. I worked it nice and then when I got off, we would we wouldn't start studying until midnight because I was against the rules, right, So then I'd stay three hours or so and then have to get up at eight, And so I would attend the class, a couple of classes. Then I would go to the union building and I would pull my shoes up, go to sleep on the couch. Next thing I know, thirty years later, I hear what he didn't have a place to stay, so he slept at the union build. Not quite that everybody's hearing it. He's setting the record straight, David Abney about that. So first job ups and I was a loader where they told me how I was going to load packages, and I did, but I also cut the grass and swapt the floors. I was really at the bottom of this totem pole and it was a job to get me through college. That's the way I looked at until I was nineteen and I had a center manager actually put his arm on my shoulder one day tell me what a great company UPS was what he had seen in me, and he thought that I could have a great career and that I really should consider. And I was going to school to be a history professor. I became a UPS employee for life. That is that the individual who was a mentor to you, because I knew that there was somebody I thought that was a manager from a from a small town at EPs. Yes, now that was a later person after I went into management. But this person. Uh. And you know, when you're nineteen, there's not a lot of people telling you how great you are. And they are there your parents and they have to sit and uh. And so that really and I think it's what makes our company special is that we can touch people for life if we take the time to get to know him and recognize him. And I thank the skuy for for the rest of my days. And uh and haven't seen him in thirty something years, but he really affected So here we are in en. You started at EPs in nine seventy four. You've been at EPs your whole professional life, I have. Did you ever think about going somewhere else? You know, I can't know. I'm sure there may have been a night that I'm going, what the heck? Right, but I don't remember that. It has been uh forty five years and uh and I'm telling you I look forward to it every day. It starts out as a job, it became a career, and then it becomes a way of life. It really does. And so you're talking to me about my career. But we have a lot of UPSs that have that similar and multiple jobs. You've been in New Jersey, you've been on the West Coast, you've been overseas. Correct, you know, I had our international operations, but I never actually but you have to remember I grew up in Mississippi. Then I was transferred to Tennessee. When I was transferred to New Jersey, which was totally out of my dad. You're going to hurt me right now. To me, it was like an international assignment just because UPS had identified that I needed exposure and I need to be taken out of my comfort zone. And uh, I would not be in the job I am today. If I had not gone to New Jersey, I found out there is a different way of life born in Brandon, New Jersey. I don't know if you know that. UM. I want to ask you what, UM, what do you think UPS is going to look like in a decade. It's very exciting to see where the company has gone. And then when you think a decade out, you can magnify anything I tell you, probably by two or three times, because that's how quick things are changing. But one of the biggest is that the consumer, for the first time in my lifetime, has got the power. It was always companies. It was always shippers, it was manufacturers, and then you bought the best thing that you could find based on what was provided. Today, it's all about the consus of the volume. It's about the volume, but it's through the Internet. The consumer has a voice, and whether it's through social networking or in other avenues, they make many of the decisions. So our company has had to migrate that it's not only the shipper, the person that pays us for the shipment, but it's also the end consumer that's our customer that's going to continue to progress. The other thing is from a global aspect. You know, five percent of the world's consumers live in the US, and global trade is going to continue to expand, and so our company is going to be much more global even than it is today. I'm curious what you think is the toughest long term strategy decision that you're working on right now. It is technology, and it's rapidly evolving technology. We can take the latest things that we can do now with technology and do things for our customers we couldn't even think about five years ago. The way that we can use predictive and prescriptive analytics and be able to solve problems before they even occur, which we couldn't do that in the past, and to be able to connect with our customers supply chains so much today. So technology is the biggest opportunity that we will have in that decade you're talking about. It could also be the biggest challenge, because if we don't embrace it, and if we don't apply it, someone will. We had to make sure its us. I want to ask you what competitor you do you most admire and why that. I have heard a lot of questions about competitors before that I have not heard the admirer. I'll tell you this, uh, I learned from our world around us. I believe that I don't have the view that any of our competitors are bad companies or bad people, you know. I think that now. I'm I'm a little bit of preferential. I prefer UPS over the others, but I think they're good companies. I think what separates us is that we put so much focus on the customer, and we have put so many of our investments in our global logistics network that I just think we're the best of the competitors. You're not going to give me a competitor that you how about an individual or a leader? You know, I would there are a lot of individuals that were out there I'll talk about I think a there's a recently retired person, uh from FEDOS, Mike Ducker, that I've always had a lot of respect for. We had international businesses at the same time. But also have to tell you that there's five hundred dollars and ups ors that I prefer. Even more so, if you want to know my favorite people and Nan Street, it's the five hundred thousand gups here that I am going through this journey with you are a good CEO. I've gone out with one of your drivers put on the brown uniform, and I know how hard they work. One last question, when you retire, are you really thinking about getting a master's degree? You know? Is that another another question? I think that was something at one time that I had thought about. One is I've been so busy and I'm having so much fun, i haven't really even thought about retirement. But right now I would say that when I do retire that my masters may very well be in these seven grandkids they have, and so they're going to get the most of my attention. So David had me. Obviously, your employers and your family very important to you. Nice to have you with us. Thank you very much,
