Ronald Chang, President, UPS Capital
Ronald Chang,
UPS Capital

As one of the world’s largest shipping and logistics companies, UPS is uniquely positioned. In 2013, the company’s package operations delivered 4.3 billion packages/documents across more than 220 countries/territories (including every address in North America and Europe) and generated $55.4 billion in revenue; it made 940 domestic flights and 1,015 international flights daily; and its supply chain solutions operations generated $8.9 billion in net revenue.1 In addition to the staggering reach of the shipping giant, the recognizable UPS brand — brown delivery trucks and uniforms appropriately nicknamed “Brown,”2 — has translated into a household name and business staple.

These factors directly contribute to the built-in competitive advantage that the company’s financial services arm, UPS Capital, is optimizing.

“We have a parent company whose name is recognized around the world as being best-in-class for supply chain solutions,” says Ronald Chang, who took the helm at UPS Capital as president in September 2014 after serving as VP of strategy and, spending 24 years working his way up and building a well-respected reputation throughout the UPS family. “Leveraging the fact that we have one of the largest logistics networks in the world, offering the UPS Capital solution on top of that experience just adds to the overall customer experience.”

UPS Capital: The Basics

In the mid-1990s, business customers began asking UPS for financing that banks weren’t willing to provide, in particular, international factoring and asset-based lending to support international growth. So UPS devised a strategy to introduce global trade. The company set three benchmarks of success in this new venture:

  • Flow of Goods
  • Flow of Information
  • Flow of Funds
  • “Having a large domestic presence in the U.S., and embarking on acquisitions to increase our global presence while expanding into supply chain services provided us with the flow of goods,” Chang says. The flow of information was accomplished by the nearly $2 billion UPS spends annually to enhance its technology platform used to track goods through the UPS network.

    The flow of funds was harder to attain, and led to the birth of UPS Capital — a UPS company focused on financing businesses whose supply chains span international borders.3 One customer utilizing UPS Capital’s services is a U.S.-based retailer sourcing goods in geographically distant countries such as China. “The time it takes to get those goods on shore and into facilities can be three to four months, and that’s a lot of working capital to tie up during that period of time,” Chang says. “Typically our customers are growing quickly and constrained with working capital and cash-flow. As soon as those goods are in our possession, we’re able to advance funds.”

    Global asset-based lending and cargo finance are becoming increasingly popular as financing options for U.S. and international customers, Chang explains. The former collateralized by offshore-warehouse or in-transit goods and the later employing the use of in-transit inventory as collateral to obtain more immediate access to working capital.


    UPS Capital has the obvious benefit of servicing customers in the “family” and keeping them happy, but it also expands the core business of UPS. Financing enables customers access to cash flow, freeing up funds that might otherwise be tied up in the supply chain — adding a stop on the supply chain to augment the customer experience, and paving the way for dialogue about other solutions.

    Another example includes, businesses that face particular risks may be interested in purchasing UPS Proactive Response Secure, which offers a sophisticated monitoring engine and dedicated logistics experts who continuously observe critical shipments — healthcare-related, time and temperature sensitive or perishable — to take action when needed. If a risk is identified due to factors such as weather or unexpected events, and/or a shipment can’t be delivered as scheduled, UPS initiates recovery/rerouting procedures based on pre-defined instructions. A variety of preventive measures are also available to prevent product spoilage or breakage. UPS Capital Insurance Agency puts an insurance policy in place to cover expenses incurred in intercepting, rerouting or expediting a shipment. The policy also covers loss or damage in the event the shipment can’t make delivery and spoils. “It provides the customer peace of mind in terms of how their shipments are moving through our network with additional security,” Chang says.

    Global Vision

    With UPS’ operations so heavily entrenched in the U.S., Chang’s goal is to prudently expand UPS Capital’s portfolio throughout the world beyond its current presence in 23 countries. He wants to spread the word about the company’s “superior value” and “parallel customer experience.” The president is reluctant to disclose which countries UPS Capital is evaluating.
    “We’re trying to focus on the 20% of countries that provide us with identifiable opportunities,” he says. Chang has noticed an increase in Canadian clients seeking ABL and cargo financing, and supply chain and small package customers in Western Europe requesting risk mitigation capabilities.

    The biggest barrier to entry is meeting regulatory requirements in the jurisdictions where UPS wants to conduct business. Laws and policies often make it difficult for outsiders to engage in commerce, and may force foreign businesses to work with or go through a governmental or private entity to enter the market. As an example, China formerly stipulated that UPS partner with a local company to do business in the country. However, UPS is accustomed to jumping through these international hoops. “It’s just a matter of evaluating different options,” Chang says. “There are ways to service our customers in those markets.”

    Fine-Tuning the Business

    Chang also continues to improve the shipping claims filing process, which has come a long way over time. Historically, claims were cumbersome for customers to manage and not one of the company’s fortés, Chang admits: “We’re actually spinning that and turning a perceived weakness into strength.” Now, the customer purchases cargo insurance or package insurance through UPS Capital Insurance Agency to activate the more-efficient claims experiences. If a package shipment is lost or damaged, UPS Capital takes over the claim process, settling a payment within four to eight days, Chang says.

    Forging a Leader

    Chang joined UPS in 1991 from the wealth management world on the suggestion of a former client. He worked his way around UPS, beginning in Finance and moving up to controller for the Asia Pacific region, and then in several vice president positions, including UPS International M&A, Treasury Europe & Asia; Finance; and global head of M&A and Intellectual Property. Later, he joined UPS Capital as VP – Strategy before being named president.

    Not long after joining UPS, Chang agreed to several rigorous international assignments, which he believes set him on the path to company success, and led to his corporate development post and presidency of UPS Capital. At the time, UPS’ overseas operations were not profitable, and company leaders had put out the call for employees who would be willing to undertake the strenuous task of turning around the operation. “I was open to the different challenges that most people would not be comfortable accepting,” Chang says. “Most people are comfortable with operations that are making a profit.”

    More than half of Chang’s career was spent outside the U.S. growing UPS’ international footprint. He completed more than 70 deals in 30 countries. He is particularly proud of acquisitions he spearheaded in Poland and the UK. “Both were best-in-class leaders in their markets and provided us with an unparalleled domestic network,” Chang says. He also led the acquisition of a Hungarian business that utilized advanced technology to distribute pharmaceutical-grade products in a temperature-controlled environment, “which represents the highest in terms of supply chain logistics that a company can offer,” Chang says.

    Cross-Border Advantage

    UPS Capital’s end goal is to furnish customers with financial services and enterprise products that enable smarter trade. “Many banks claim to be global, but for all intents and purposes — for the small and medium-sized customers — they’re mostly domestic when you’re talking about asset-based lending and factoring,” Chang says. “They want to have the goods within the borders so they can secure them and provide funding against those goods. At UPS, what we’re saying is we can provide you with funding even if your goods are outside the borders of the United States.”

    Jill Hoffman is editor of ABF Journal.


    1. UPS Fact Sheet. Available at: (last accessed January 16, 2015).
    2. United Parcel Service. Available at: (last accessed January 16, 2015).
    3. UPS Capital: What we do. Available at: accessed January 19, 2015).