UPS 2004 Annual Report Download - page 15

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CLEVELAND, OHIO 9:24 A.M.


We believe expanding global economies,
development of international markets by customers
large and small, and direct-to-consumer shipping
trends — driven by just-in-time inventory and online
purchasing — offer growth opportunities for the
small package business.
Going forward, look for UPS to continue
international volume, revenue, and profitability
growth, with an excellent operating margin. UPS
anticipates achieving 2 to 3 percent U.S. domestic
volume growth, along with an improving
operating margin.
To achieve growth objectives, UPS will rely
on well-developed strengths — leading-edge
technology, a broad portfolio of services and
integrated solutions, and the most efficient global
network in the industry.


UPS invests hundreds of millions of dollars in its
network annually for facilities, vehicles, and aircraft.
In Europe, construction continued on the expansion
of the company’s highly automated air hub in
Cologne, Germany — the company’s largest hub
outside the United States. In addition, UPS’s service

portfolio was broadened to, from, and within the 10
countries that joined the European Union in 2004.
UPS also is extending its presence in Asia — one of
the most important markets in the world. In addition
to gaining 12 additional air routes to more extensively
serve parts of China, Japan, and Hong Kong, UPS
concluded an agreement with its Chinese partner to
take full control of its international express operations
in more than 200 cities in China by the end of 2005.
These cities collectively account for about 80 percent
of China’s GDP. UPS concluded a similar agreement to
gain control of its express operation in Japan.
In addition, in early 2005 UPS announced
plans to expand its supply chain presence in China,
combining small package delivery with freight
forwarding, customs brokerage, and distribution.
Strengthening the logistical links between China
and global markets is critical to both China and
companies doing business in China.
In the United States, network improvements
reduced transit times by one day on UPS ground
service between 20 metropolitan areas, including
Atlanta, Baltimore/Washington, D.C., Chicago,
Dallas, Houston, Kansas City, Los Angeles,
Philadelphia, and Pittsburgh. The company will
continue enhancing transit times in the United States
in 2005 and beyond.