UPS CEO Puts Data-Center Logistics Market at $15 Billion a Year

UPS Chief Executive Carol Tomé sees a roughly $15 billion annual logistics market emerging around the data-center boom, from shipping valuable microprocessors to moving heavy equipment and maintaining facilities, she told Reuters.

The estimate describes a potential market, not a UPS revenue forecast or a tally of orders the company has secured. UPS has not disclosed how much revenue its data-center business currently generates.

More than the construction phase

Tomé said the opportunity spans airfreight for microprocessors, ocean transport for heavier equipment, warehousing and delivery. In her assessment, demand for maintenance and replacement parts could extend for decades after facilities are built.

That makes the business broader than delivering equipment to a new construction site. It also includes the recurring movement of components needed to keep operating data centers running.

A smaller business than healthcare, for now

Tomé said UPS's data-center revenue remains below the roughly $3 billion its healthcare business generated in the latest quarter. Healthcare offers a comparison for how a specialised logistics operation can grow: UPS generated about $6 billion from that business in 2020 and expects approximately $13 billion in 2026.

The data-center push comes as UPS pursues its “better, not bigger” strategy, including reducing less-profitable Amazon volumes. The company is seeking more valuable logistics work rather than maximising the number of packages it handles.

Sources

• Reuters: UPS CEO sees $15 billion annual revenue opportunity from data-center boom