UPS CEO sees $15 billion annual revenue opportunity from data center boom
UPS•UPS CEO Carol Tome said data center-related logistics could provide a $15 billion annual opportunity, spanning airfreight, ocean cargo, warehousing and deliveries. She said demand should continue for decades, including maintenance shipments after facilities are built.
1. Data center opportunity
Tome said UPS handles shipments for data center projects from manufacturing floors to project sites, including flying in advanced microprocessors, arranging ocean freight, warehousing equipment and delivering parts. She described the opportunity as $15 billion per year and said demand is likely to persist for decades as facilities need parts and equipment to keep operating.
2. Focus on higher-margin work
UPS data center revenue is growing quickly but has not yet matched its healthcare segment, which generated $3 billion in the latest quarter; Tome declined to give a figure for the newer business. UPS reported $6 billion in healthcare revenue in 2020 and expects that segment to reach $13 billion this year. Tome said UPS has moved through an important inflection point as it seeks to improve margins while reducing less-profitable deliveries.
