Thursday, August 22, 2019

CEO Daily: UPS's Drone Hopes

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August 22, 2019

Good morning.


UPS CEO David Abney stopped by Fortune‘s offices yesterday to talk about the tech-driven changes washing across his industry—drones, self-driving vehicles, massive opportunities to collect and analyze data—all demanding non-stop transformation in the years ahead.


You might think the maneuvering of giant competitors like FedEx and Amazon would keep Abney awake at night. But he said keeping track of his big competitors is relatively easy; it's the disruptive start-ups that pose the bigger threat. "With all the technology and artificial intelligence driving change, we have to think and act like an entrepreneur, because if we don't, someone else will."


Abney says he expects his company to be the first to receive FAA approval to operate commercial drones nationwide, without the geographical restrictions currently limiting their use. UPS' first big application, he says, is likely to be in health care.


The UPS chief, who recorded a 30% increase in next day deliveries in the last quarter, will be sharing his insights about the company's transformation at the Fortune Global Forum in Paris Nov. 18 & 19. You can get more information about that event here.


More news below. And don't miss ProPublica's deep dive into the cozy relationship between Amazon and the Defense Department, which is being published on Fortune.com this morning.


Alan Murray
alan.murray@fortune.com
@alansmurray


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TOP NEWS


Inversion Again


The spread between the 2-year and 10-year yield briefly inverted again yesterday afternoon, following the release of Fed minutes that suggested its first rate cut in more than a decade was a mid-cycle "recalibration" and further cuts were not guaranteed. So stay tuned for Fed Chair Jerome Powell's speech in Jackson Hole tomorrow morning: if he talks about mid-cycle adjustments again, there probably won't be more imminent cuts, and the markets may be displeased. CNBC


G7 Summit


How best to avoid a Trump-induced storm over the joint communiqué that's issued at the end of the next G7 summit? Don't issue a communiqué—that's the strategy of French President Emmanuel Macron, who has the pleasure of hosting this year's event in Biarritz. Macron also isn't keen on Trump's idea of re-admitting Russia to the club (it was booted out after the annexation of Crimea, and readmitting it would mean tacitly accepting that episode.) Politico


Eurozone Health


The latest IHS Markit manufacturing figures for the Eurozone show a welcome slowdown in contraction, but the manufacturing outlook looks more grim than it has in more than six years. The U.S.-China trade war is to blame. IHS Markit chief business economist Chris Williamson: "Companies are braced for a sustained period of weakness, and as a result are showing greater reluctance to take on additional staff." Reuters


Facial Recognition


The European Commission is looking into strict regulation of facial recognition technology, in order to ensure people have rights over the use of their facial data, and know when it is being used. The move, part of a wider A.I. regulation overhaul, comes in the wake of several incidents where the technology was found to be used on people without their knowledge. Financial Times



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Content From Deloitte

Sounding Board


With CEOs facing radical disruption and increasingly complex strategic challenges, a good board can be crucial to company success. But how can you make sure the relationship is productive and, most importantly, strategic? Deloitte explains.


Read more


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AROUND THE WATER COOLER


Indefinite Detention


The Trump administration wants to be able to detain immigrant families indefinitely by scrapping the "Flores settlement" rule that effectively mean they need to be released after 20 days. Expect a court challenge. Meanwhile, the administration also wants to end the U.S.'s citizenship birthright. Fortune


Downturn Options


If the U.S. does suffer an economic downturn, Wall Street and Washington won't have many options to mitigate it, the Wall Street Journal reports. Low short-term interest rates mean the Fed has little wiggle room to stimulate the economy, the Republicans and Democrats disagree on how to provide that stimulus, and in any case the exploding deficit makes both their preferred methods–respectively, tax cuts and spending increases–difficult to implement. WSJ


Flight Risk


What does a 19-hour flight do to passengers and staff? Qantas, which wants to launch non-stop routes from Sydney to London and New York in a few years' time, is going to find out. The Australian flag carrier will run trial flights this year, each carrying up to 40 passengers wearing sensors that will track their sleep patterns. Food and beverage consumption will also be monitored. Singapore Airlines is already running a Singapore-New York route that takes around 18.5 hours. BBC


Inslee Out


Climate warrior Jay Inslee is the latest to drop out of the Democratic presidential nomination race. The Washington governor was lagging in polling and fundraising, and is the third candidate to leave the field, after John Hickenlooper and Eric Swalwell. Bloomberg


This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.


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