UPS Expected to Restructure Sales Force

United Parcel Service Inc., trying to adapt its rigid culture to a slew of companies acquired during the past two years, is expected to unveil today a major restructuring of its sales force. The move is aimed at accelerating the package carrier’s growth in businesses that help companies manage their supply chains. The decision to form a single army of sales personnel that pitches everything from spare-parts distribution to mail pickup to financing, instead of previous teams that overlapped or sold only a narrow range of services, has been months in the making. The sales overhaul, which doesn’t include any major changes to the marketing of basic transportation services such as air and ground deliveries, is aimed partly at revving up expansion of UPS’s burgeoning nonpackage businesses. They are growing much faster than the company’s delivery operations but still generated only 8% of last year’s total revenue of $30.65 billion. UPS also is trying to shake up its own culture, one of the strongest in corporate America, by knocking down organizational barriers that could keep some of its newest supply-chain units from reaching their potential. UPS officials acknowledge that the dominance of package deliveries has created some resistance within the 95-year-old company to aggressively promoting the new businesses, since they don’t always generate additional package volume for UPS.”

The Wall Street Journal: “UPS will face a number of challenges as it unifies its supply-chain sales force, including overcoming reluctance at companies that have been hurt by the economic slowdown. Spending cuts by penny-pinching companies already have bruised the UPS logistics unit, which is taking longer than expected to become profitable. The field of competitors also is crowded, though no logistics rival can match UPS’s massive fleet of delivery trucks. And it could be hard for at least some UPS insiders to broaden their definition of the company’s core business beyond its sprawling package-carrying network. UPS said it still is evaluating whether changes are needed in incentive-pay systems for its sales force as a result of the restructuring. It declined to disclose the expected financial impact of the overhaul on the nonpackage businesses, but said the move could generate hundreds of millions of dollars in additional package revenue a year.” (Source: the Wall Street Journal, Rick Brooks reporting)