UPS tries to boost delivery to investors Parcels group has struggled to integrate acquisitions and justify its strategy since going public
There have been few better investments than the Dollars 100 of borrowed cash that Jim Casey, a 19-year-old entrepreneur, used to buy twotelephones and a fleet of bicycles in 1907.
Nearly a 100 years later, the messenger service he founded from a tiny Seattle office has grown into the world’s largest parcel courier, with a market capitalisation of Dollars 85bn and operations in more than 200 countries. But as United Parcel Service approaches its centenary, the group’s investment appeal is no longer so clear.
In the seven years since UPS went public, its shares have struggled to gain momentum, rising 30 per cent compared with a near tripling in those of FedEx, its biggest rival.
Asked at an investor conference this month whether UPS would have been better remaining private, Scott Davis, chief financial officer, replied: “No comment”.
Investors’ lukewarm attitude towards UPS, known as “Big Brown” after the colour of its trucks, in part reflects the sluggish growth of its mature domestic business, which has lost market share to FedEx. But the biggest source of caution is the group’s expansion beyond parcels into a broader range of supply chain services.
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