UPS finance chief says Amazon doesn't worry him

United Parcel Service (UPS) reported a big earnings beat—its highest ever fourth-quarter earnings—thanks to its growth in international package delivery. Revenue, however, came in light of estimates.

It’s a sigh of relief for the world’s largest package delivery company, following two disappointing peak holiday seasons in a row.

In 2013, many customers (and investors) were left disgruntled and giftless on Christmas Eve when UPS experienced a surge in late e-commerce orders that it couldn't fulfill on time. The company overcompensated in 2014 by overspending in preparation for the same demand, which never happened. In 2015, UPS had a Goldilocks season—with a 97% to 98% on-time delivery rate.

Richard Peretz, CFO of Atlanta-based UPS, told Yahoo Finance that technology is the main driver of this success.

In 2013, UPS implemented a platform called Orion, which stands for On-Road Integrated Optimization and Navigation—a proprietary routing software that uses customized online map data and details to make delivery routes more efficient. Additionally, UPS rebranded Belgian drop-off point network Kiala (which it acquired in 2012) and rebranded it as “UPS Access Points"—neighborhood stores where consumers can pick up their packages rather than having to trek to warehouses after being met with the dreaded “missed delivery slips.” UPS currently has 22,000 access points in seven countries.

UPS also offers MyChoice, a free service which allows consumers to choose where and when packages can be delivered. (For example, if you’re not going to be home by the end of the workday you can reroute your package to the local access point.) “MyChoice is one of the big differentiators for UPS. We’re really giving convenience, choice, and control of the transaction to the end user that hadn’t been in the marketplace. There are 21 million people that are communicating with us now through UPS MyChoice,” says Peretz.

Peretz touted the strength of the European market as another bright spot this quarter. “We’ll be spending over $2 billion to continue to build capacity across the European continent,” he says. In spite of macroeconomic uncertainty, the company’s international adjusted operating profit was up 16% in the fourth quarter, led by Europe.

Still, one major headwind continues to be a cause for concern: Amazon (AMZN). Because of increased costs and package volume, Amazon has been transforming from UPS’s biggest consumer to its biggest competitor. In December, the Wall Street Journal reported that rising costs and package volume have sparked Amazon to develop its own delivery routes, build its own freight operation, and prepare for drone deliveries.

Peretz denied claims of animosity between the two companies, but says he believes that UPS is the clear choice for consumers. “The Amazon relationship is mutually beneficial, and they are a valued customer to UPS," he says. "The whole space of e-commerce is a great position for UPS because we want to become the shipper of choice. We’re adding things to the market that didn’t exist before.”