UPS CEO talks about holiday shipping, drones, Amazon threat

DALLAS (AP) — Online shoppers are becoming more demanding — impatient might be a better description — and that is good for UPS.

Profit at United Parcel Service Inc. is rising partly because next-day and second-day deliveries in the U.S. are booming.

Big Brown has invested heavily in new, highly automated sorting facilities to handle the growing volume. The company will get a big test of that investment during the upcoming holiday season, when it expects to process about 32 million packages per day.

UPS Chairman and CEO David Abney, 64, spoke recently with The Associated Press about the peak delivery season, the growth in online shopping, and the company's foray into making deliveries with drones. The comments are edited for brevity.

Q. UPS just reported a huge increase in next-day deliveries in the U.S. What's going on?

A. There has just been a structural change when it comes to air shipments, and big e-tailers and retailers and others are wanting to get packages to customers within 24 hours. Our next-day volume of core shipments is up 24%, our second-day or our preferred is up 17%, and it really led to our best quarterly profit in history of 112 years, and we're happy by that.

Q. How about international revenue? That was nearly flat.

A. The top line from the U.S. standpoint was very positive, and from the international side top line was a little less than what we would have liked to have seen, but under these circumstances it still increased, so we took that as a positive aspect too.

Q. You're heading into the peak season for business. How are you set up for delivery of holiday purchases?

A. We've got momentum for peak. The forecast: we expect that the number of shipments will increase 50% over what we normally do. Our service levels are high. We've opened our...