Air cargo in the spotlight: Carol Tome is an Executive to Watch in 2021

Despite the challenges of 2020 due to the COVID-19 pandemic, the year has proven the value of airfreight, supporting express deliveries of holiday gifts and just-in-time shipments to keep factory lines moving, and providing rapid transport of personal protective equipment (PPE) for health care workers caring for those affected by the virus. The past year has spotlighted the industry for outside observers, even as it has presented various operational challenges. Flights have been canceled, travel restrictions have been enforced around the world, and disruptions in other transport modes push demand toward air although capacity remains scarce on many trade lanes. This year is coming to an end, but air cargo may face its greatest challenge yet in the months ahead. Billions of people are relying on the logistics industry to safely distribute doses of the vaccines now in their final stages of regulatory approval, and many doses will make at least part of the journey by airfreight. With so many of the specific transportation requirements still unknown, industry leaders are called to rise above any adversity in service to the great task of global vaccination. In this year’s survey of Air Cargo World readers, respondents recognized the difficulties posed for global supply chains. Considering the many obstacles executives have risen above in 2020, and the task ahead in 2021, Air Cargo World has selected three air cargo executives who we expect to guide their companies through the challenges of 2021 and beyond. In the third of three parts of this feature, Air Cargo World profiles UPS’ Carol Tome. Read part one, profiling Lufthansa Cargo’s Dorothea von Boxberg, here. Read part two, profiling Kuehne + Nagel’s Yngve Ruud, here. Carol Tome: UPS aims for ‘better, not bigger’ [caption id="attachment_93816" align="alignright" width="350"] Carol Tome, CEO, UPS[/caption] As an integrator with its own vast aircraft fleet, UPS has stood to benefit from the rapid growth in e-commerce and the increased freight rates and surcharge in airfreight caused by the COVID-19 pandemic. Revenue has indeed increased year over year for the past two quarters, climbing by 13% to $20.5 billion for Q2 and by 16% to $21.2 billion for Q3, while net income has also risen YoY. New CEO Carol Tome took the organizational reins June 1, during this period of dramatic revenue growth at UPS and upheaval across aviation. Tome has a finance-heavy background and spent 18 years as the chief financial officer at Home Depot. She has been a member of the UPS Board of Directors since 2003, and serves as chairperson of the Audit Committee. During UPS’ second-quarter earnings call — Tome’s first as CEO — she indicated that her tenure will mark a shift in strategy to maximize the benefit from current investments and infrastructure, saying, “It’s all about becoming better, not bigger.” Notably, Tome already declined the opportunity to further grow UPS’ 747 fleet with the purchase of additional freighters before Boeing ends production of the type in 2022. More recently, during the Q3 earnings call in late October, Tome noted the shift in strategy has already yielded some benefits to UPS’ bottom line. Initial network optimization in UPS’ commercial sector, and strategic targeting of small and medium-sized businesses as customers improved the revenue per piece from earlier quarters. Overall cost-cutting also factors into UPS’ strategy, and will include significant reductions in capital expenditures across its business units, from around $5.6 billion in 2020 to around $4 billion for 2021. The UPS air network is among those areas targeted for optimization. “As we think about where the demand is going for next-day air in the United States, versus where the demand is exploding outside of the United States, we have an opportunity to optimize our aircraft globally,” said Tome. The new CEO has already spearheaded cuts to redundant programs like UPS Next, an internal initiative to drive innovation in the company that was replicating work done elsewhere throughout UPS. Tome also noted that 21 decision-making committees have been whittled down to six, and that the pruning of internal bureaucracy has been well-received by employees, who are “embracing change,” according to Tome. Additional changes are expected as UPS leadership evaluates its internal processes and business units under Tome’s leadership. “I’ve spent a lot of time looking at the risks and opportunities facing our business, including an evaluation of our business portfolio,” said Tome on the earnings call. “We are an opportunity-rich company. We are making progress but, given the size of our business, it will take time to optimize our network, to stop processes that have added cost and no customer value, and to fully reach our potential.”

Air cargo in the spotlight: Carol Tome is an Executive to Watch in 2021

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