UPS Chief urges US transport investment

The US must reinvest in its ageing, overused transportation networks or risk losing ground to the world’s other leading economies, United Parcel Service’s Chief Executive said.

Scott Davis told the Financial Times that the nation’s private sector should seek out opportunities to partner with transportation authorities to help modernise the infrastructure that underpins the US economy.

“We’ve got to work very closely with the government to look ahead and take a candid look at where we are,” said Mr Davis, who took over as Chief Executive of UPS in January. “It’s so critical to the future competitiveness of the US that we build the transportation infrastructure that we need.”

The US may need to spend USD 1,600bn in the next five years to restore its infrastructure to good condition, according to the American Society of Civil Engineers.

While some state and local governments have sought investors to help fund infrastructure improvements, the programmes often meet resistance from politicians and consumer advocates concerned that the arrangements cede control of a steady source of revenue to private entities.

Repairing and upgrading ageing roads and bridges, antiquated air-traffic control systems and overcrowded ports and railways would help ensure the US remains a viable trading partner, Mr Davis said. Total cross-border transactions may swell to more than USD 70bn by 2025, compared with USD 10bn last year.

“If we sit still, we may get left out of global trade,” Mr Davis said. “That’s the danger for the US. Just think of the problems we’re going to have with the ports and the highways and the airports and the rails.”

In spite of its global reach, the US remains the Atlanta-based company’s biggest and most important market.

UPS underscored its continued dependence on the US this month, warning that a drop in demand for domestic package deliveries, which had set in by February, may leave the company short of its quarterly profit forecast in spite of growth from its international and supply-chain management businesses. FedEx, UPS’s arch-rival, cited the same concerns for the US economy last week.

The US must reinvest in its ageing, overused transportation networks or risk losing ground to the world’s other leading economies, United Parcel Service’s chief executive said.

Scott Davis told the Financial Times that the nation’s private sector should seek out opportunities to partner with transportation authorities to help modernise the infrastructure that underpins the US economy.

“We’ve got to work very closely with the government to look ahead and take a candid look at where we are,” said Mr Davis, who took over as chief executive of UPS, the world’s largest package-delivery company, in January. “It’s so critical to the future competitiveness of the US that we build the transportation infrastructure that we need.”

The US may need to spend USD 1,600bn in the next five years to restore its infrastructure to good condition, according to the American Society of Civil Engineers.

While some state and local governments have sought investors to help fund infrastructure improvements, the programmes often meet resistance from politicians and consumer advocates concerned that the arrangements cede control of a steady source of revenue to private entities.

Repairing and upgrading ageing roads and bridges, antiquated air-traffic control systems and overcrowded ports and railways would help ensure the US remains a viable trading partner, Mr Davis said. Total cross-border transactions may swell to more than USD 70bn by 2025, compared with USD 10bn last year.

“If we sit still, we may get left out of global trade,” Mr Davis said. “That’s the danger for the US. Just think of the problems we’re going to have with the ports and the highways and the airports and the rails.”

In spite of its global reach, the US remains the Atlanta-based company’s biggest and most important market.

UPS underscored its continued dependence on the US this month, warning that a drop in demand for domestic package deliveries, which had set in by February, may leave the company short of its quarterly profit forecast in spite of growth from its international and supply-chain management businesses. FedEx, UPS’s arch-rival, cited the same concerns for the US economy last week.