UPS Chief Financial Officer Kurt Kuehn Sees Growth in Next-Day Delivery

While established companies and recent start-ups promising same-day delivery are getting a lot of media air time these days, UPS Chief Financial Officer Kurt Kuehn predicts even faster growth for shippers who wait just a little longer.

“Same day is not new. Courier services have been doing that in metro areas for a long time,” said Kuehn, who appeared on CNBC’s Squawk Box as a part of the network’s Global CFO Council series. “We think rather than same-day delivery, the big push will be local next-day delivery. We see (next day) as a much bigger force over time than the limited same day deliveries.”

Kuehn said UPS is noticing more and more retailers are using their brick-and-mortar retail outlets to fulfill orders in the evening for next-day delivery.

Kuehn also noted a trend toward more shipments going direct to consumers. “We’re very busy working with retailers that have brick and mortar stores to help them compete with Internet companies by offering superior delivery times and taking advantage of their local retail outlets as distribution outlets.”

Asked about the economy’s slow start and prospects for the remainder of the year, Kuehn was optimistic.

“The first quarter was challenging. You’re hearing that in retailer reports. There was a lot of disruption. It impacted UPS,” he said. “We think beneath that noise, as the dust settles the rest of the year, we’re going to see a slowly growing economy. Clearly there are some challenges in some areas. But we’re pretty confident that it’s going to be a solid year.”

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