Why Ultra-High-Yield UPS Is Investing $48 Million to Control the Temperature
United Parcel Service is in the middle of a turnaround, and changing its customer base has been a key part of the process.
Overview
United Parcel Service (NYSE: UPS) is deeply unloved on Wall Street, with the stock down 50% from its 2022 high. To be fair, the parcel delivery company has been going through a massive business overhaul, and its quarterly earnings results have been pretty tough to read. But it is important to keep in mind what the company is doing and why. The announcement of a $48 million investment in temperature-controlled facilities highlights something big.
To simplify this industrial giant's turnaround effort, it is basically trying to modernize. That requires spending money to update technology, cut staffing levels, and shutter less efficient facilities. At the same time, however, UPS has been honing in on its best customers, which has required limiting its relationship with high-volume customers that offer only small profit margins.
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Originally published at www.fool.com.