As Carol Tomé takes over as chief executive officer of United Parcel Service Inc. on Monday, she inherits the Amazon dilemma: The same online shopping explosion that is increasing delivery volume also is squeezing profit margins.
How the former finance chief at Home Depot Inc. solves the conundrum — which has been magnified by the coronavirus pandemic — is likely to define her tenure at UPS. Prominent voices on Wall Street are already recommending that she reject some business from Amazon.com Inc., which is a significant customer as well as a burgeoning competitor.
“What she needs to do is take a very firm stance and say, ‘This is not going to work long term, you need to pay us more,’” said Cowen & Co. analyst Helane Becker. “If you say ‘No’ every once in a while, you probably wind up with a better relationship.”