UPS CEO Carol Tomé conquers the delivery frenzy by doing less (better)

Onboarding must’ve been fun… Carol Tomé became CEO of the world’s largest package delivery company in June last year, right at the height of the delivery frenzy. Her new company was also gearing up to distribute vaccines around the globe to curb a deadly pandemic. Tomé is the first woman to run UPS in its 113-year history, and one of only 30 female CEOs of S&P 500 companies. She’s also the first “outsider” to serve as UPS’ chief executive.

Rising to the challenge… After 18 years as CFO at Home Depot, where she helped the retailer emerge from the financial crisis, Tomé brought her strategic leadership and number-crunching skills to UPS. Born in Jackson, Wyoming as the oldest of four, Tomé learned to hunt and fish as a child. That resourcefulness might’ve prepped her to wrangle the challenge of coronaconomy shipping:

• +32%: Total US online retail spending soared to $792B last year.
• 24.7M: How many packages UPS delivered per day (yearly total: 6.3B).
• $85B: UPS sales, up 14% from 2019. Amazon accounted for ~$11B of that.

Focus on the bottom line… Companies can maximize profit in two ways: raising prices and cutting costs. Tome did both to protect the biz, as soaring demand strained UPS’ capacity and raised costs. As we were WFH’ing, business shipments plunged while consumer shipments soared (so much TP). Those extra home stops meant higher costs for UPS. Tomé’s approach: less is more.

• UPS started focusing on more profitable deliveries (like heavy packages). It canceled some shipping contracts that were no longer as profitable, evaluating corporate customers on value — not volume.
• It placed stricter shipping limits than ever before to avoid overwhelming the network. And it increased prices on big retailers whose volumes spiked (think: surcharges of up to $4 per package).