Logitech profit tops forecasts as gaming and video equipment demand grows
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UPS chief puts data center logistics opportunity at $15 billion a year
Carol Tome sees demand lasting decades as UPS pursues higher-margin work and reshapes its delivery network.
UPS CEO Carol Tome estimates that data centers offer a $15 billion annual opportunity for logistics providers, with demand potentially spanning decades. In an October 27 interview, she outlined the business as UPS seeks greater profits from a smaller volume of higher-value shipments.
UPS handles air transport of advanced microprocessors, ocean freight for equipment, storage and deliveries to construction sites. Tome said the many data center projects under construction would continue needing equipment and parts to operate after completion.
Tome did not disclose how much revenue UPS earns from data centers. She said it was increasing rapidly but remained smaller than the company's healthcare business, which brought in $3 billion during the latest quarter. Her remarks came after better-than-expected earnings for the third quarter prompted UPS to lift its full-year forecasts for revenue and profit.
The company has combined facilities to lower costs and invested in temperature sensors and systems for scanning and tracking packages. Healthcare, returns and data centers are among the areas it is emphasizing as it makes its network smaller and more profitable.
FedEx is also seeking more lucrative shipments and has created a dedicated team to attract data center customers. Both companies are moving away from less profitable delivery work. UPS has dropped millions of Amazon doorstep deliveries it regarded as unprofitable, helping improve its margin.