UPS 2015 Annual Report Download - page 14

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2
Business Strategy
Customers leverage our broad portfolio of logistics capabilities; balanced global presence in North America, Europe,
Middle East, Africa, Asia Pacific and Latin America; reliability; industry-leading technologies; and solutions expertise for
competitive advantage in markets where they choose to compete. We prudently invest to expand our integrated global network
and service portfolio.
Technology investments create user-friendly shipping, e-commerce, logistics management and visibility tools for our
customers, while supporting our ongoing effort to increase operational efficiencies. We actively monitor and invest to gain
insights into emerging technologies such as additive manufacturing (3D printing), route and network optimization tools, and
advanced product monitoring and tracking functionality.
Our service portfolio and investments are rewarded with among the best return on invested capital and operating margins
in the industry. We have a long history of sound financial management and our consolidated balance sheet reflects financial
strength that few companies can match. Cash generation is a significant strength of UPS, giving us strong capacity to service
our obligations and allowing for distributions to shareowners, reinvestment in our business and the pursuit of growth
opportunities.
We enable and are the beneficiaries of the following trends:
Expansion of Global Trade
We continue to invest to expand in both developed and emerging international markets. In Europe, we have committed to
nearly $2 billion of capital to expand our infrastructure to meet the growing demand for cross-border commerce. The
enhancements to our European ground network are designed to ensure that we provide fast, reliable service to high-value
customers moving goods across country borders.
Emerging market opportunities continue to expand. Over the next ten years, these markets are expected to represent the
majority of global GDP growth and an increasing proportion of global trade. Emerging markets are an understandable focus of
investment and growth for our current customers and will be a source of our next generation of customers. To take advantage of
these opportunities, we continue to make long-term investments in markets where our customers choose to grow. Over the past
ten years, we have established a strong market presence in three leading emerging markets: China, Poland and Turkey. The
Middle East, Latin America, Africa and Eastern Europe are also becoming increasingly important to us.
Transcontinental and trade across borders are predicted to grow faster than U.S. and global gross domestic production for
the foreseeable future. As a result, U.S. and international economies are becoming more inter-connected and dependent on
foreign trade.
UPS plays an important role in global trade and is well positioned to take advantage of trade growth, wherever it occurs.
Our global presence and productivity enhancing technologies allow customers to expand into new markets. We advocate the
expansion of free trade, including the passage of regional trade pacts and the removal of trade barriers. The 2015 Trans-Pacific
Partnership agreement will connect 12 global economies and 800 million consumers across the Americas and the Asia-Pacific
regions. We believe free trade is a catalyst for job creation, economic growth and improved living standards.
These trends underscore why we believe our international business is a catalyst for our future growth.
e-Commerce Growth in Retail Sectors
Throughout much of the world, e-commerce growth continues to outpace traditional lines of business. Our integrated
network puts us in an ideal position to capitalize on the shift towards residential deliveries. We continue to create new services,
supported by our technology, that complement the traditional UPS premium home delivery service and address the needs of e-
commerce shippers and consignees. Our offerings span a broad spectrum that supports retailers across their value chains, from
global sourcing to distribution and returns. We offer cost-effective solutions such as UPS SurePost, for U.S. domestic
shipments and UPS i-parcel for a low-cost deferred cross border solution, where economy takes precedence over speed. We
also offer feature-rich solutions, such as UPS My Choice, a service that provides receivers with visibility and control of their
inbound shipments.