I'm Zack Fuss and today we are breaking down UPS. With over 100 years of history, it's a business we all know as consumers and one many of us interact with on a daily basis. But in investing circles, UPS carries far less relevance and attention share despite its large market cap. To break down UPS and its rich history, I am joined by former Transport Analyst Matt Reustle. Please enjoy this breakdown of UPS.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
[00:02:37] - [First question] - The footprint of UPS in the US economy
[00:04:11] - What relevant metrics analysts use to understand UPS’ value
[00:06:57] - How logistics networks work and operating leverage on their fixed assets
[00:10:43] - UPS’ origin story and key differences between it, Amazon, and FedEx
[00:18:24] - Whether or not Amazon is consuming the market or if the market is growing
[00:22:20] - Decreased return on capital and the roadmap to increase returns going forward
[00:25:14] - Making a decision to lean into their network and what it meant for their customers
[00:27:33] - The importance of management and needing outsider management
[00:31:40] - Capital investment programs and what Amazon’s growth means for UPS
[00:34:41] - Secular changes versus historical cyclicality of fulfillment businesses
[00:36:35] - Competitive impacts Amazon and USPS could have on UPS’ future success
[00:42:26] - Why cross-border delivery is such a lucrative aspect of this market
[00:42:51] - Lessons for investors and builders when studying UPS’ story
