kết quả dữ liệu bongdasoNews #84 - UPS forecasts softer peak shipping season

Amazon business drags down Q3 domestic air volume, but parcel carrier swings to profit

UPS on Thursday reported positive revenue and profit growth in kết quả dữ liệu bongdaso third quarter, turning kết quả dữ liệu bongdaso corner on nearly two years of subpar performance. But kết quả dữ liệu bongdaso company also cautioned that macroeconomic conditions and more in-store shopping could dampen peak season shipping activity.

Full-year revenue guidance of billion was down slightly, mostly related to kết quả dữ liệu bongdaso disposal of Coyote Logistics. kết quả dữ liệu bongdaso forecast suggests UPS (NYSE: UPS) doesn’t expect a surge of shipping activity during kết quả dữ liệu bongdaso current quarter, especially with management flagging a slowdown in U.S. online sales and lower-than-expected global manufacturing activity.

“Recently, shippers have tempered their volume expectations,” CEO Carol Tome said on a conference call with analysts. More than 100 of UPS’s top customers, who represent 60% of network volume and 85% of kết quả dữ liệu bongdaso peak surge, have tightened their forecasts for kết quả dữ liệu bongdaso holiday season.

Estimated electronic and mail-order sales in kết quả dữ liệu bongdaso fourth quarter are expected to increase about 3%, down from 5% previously, kết quả dữ liệu bongdaso UPS chief said

“Part of this, we believe, is influenced by kết quả dữ liệu bongdaso tight, compressed peak period. There are only 17 shipping days between Thanksgiving and Christmas Eve. And what forecasters and some of our customers are saying is, because of kết quả dữ liệu bongdaso [short] shipping season, many customers will go into a store to complete their holiday purchases.

“kết quả dữ liệu bongdaso consumer actually is in pretty good shape. It will still be a good peak … but just not as dynamic as people thought at kết quả dữ liệu bongdaso beginning of kết quả dữ liệu bongdaso year,” said Tome.

kết quả dữ liệu bongdaso parcel logistics giant said higher revenue – up 5.6% year over year to .2 billion – combined with productivity initiatives produced a billion operating profit, up 22.8% on an adjusted basis. Despite choppy macroeconomic conditions, UPS was able to increase revenue and profit margin by improving revenue quality and holding kết quả dữ liệu bongdaso line on costs.

Results beat analysts’ estimates, including adjusted earnings per share of .76 versus a consensus of .57. UPS in September completed kết quả dữ liệu bongdaso sale of freight brokerage Coyote Logistics to RXO for billion, which resulted in a 2 million after-tax profit gain.

Strong domestic volumes

UPS said a 6.5% increase in domestic parcel volume, partially offset by a 2% decline in yield, pushed up domestic revenues by nearly 6% to .5 billion. Consolidated pre-tax operating profit was up nearly 47%. It was kết quả dữ liệu bongdaso second consecutive quarter of average daily volume growth for kết quả dữ liệu bongdaso segment and kết quả dữ liệu bongdaso highest year-over year-growth rate since kết quả dữ liệu bongdaso first quarter of 2021. Management said revenue per piece improved sequentially in kết quả dữ liệu bongdaso third quarter due to upward base-rate adjustments on less-profitable B2B shipments from sources such as Shein and Temu in China.

Domestic air volume fell 6.9% in kết quả dữ liệu bongdaso third quarter, all of it attributed to kết quả dữ liệu bongdaso glide down in business with Amazon – UPS’s largest customer. Amazon in recent years has shifted transportation from UPS and other carriers as it builds out its own logistics infrastructure. Tome said kết quả dữ liệu bongdaso reduction in Amazon air shipments is based on Amazon trading down from air to less expensive ground transportation and moving some volume to its own air cargo network.

UPS has completed kết quả dữ liệu bongdaso closure of 45 sort operations so far this year, including nine full buildings. Consolidation contributed to an 8% improvement in pieces per workforce hour, said CFO Brian Dykes.

“While 8% might not seem like a big number, that translated into an efficiency gain of 11 million hours” and overall production improvements offset 50% of kết quả dữ liệu bongdaso union wage increase from last year’s labor contract, he said. kết quả dữ liệu bongdaso express delivery provider is moving 5% more volume through automated facilities and making sure legacy sort centers are hitting performance targets.

Costs will also improve as kết quả dữ liệu bongdaso high wage inflation at kết quả dữ liệu bongdaso start of kết quả dữ liệu bongdaso contract normalizes.

International air capacity

Revenues in kết quả dữ liệu bongdaso international package segment increased 3% to .4 billion, bolstered by higher yields as volumes flattened out. Margins of 18% drove pre-tax profit up 17%. UPS added over 200 flights connecting kết quả dữ liệu bongdaso Asia-Pacific region to Europe and kết quả dữ liệu bongdaso United States to meet peak holiday shipping demand, a significant increase compared to kết quả dữ liệu bongdaso same period last year. UPS recently said it also added a new flight connection at Sharjah International Airport in kết quả dữ liệu bongdaso United Arab Emirates, enabling packages from China and South Korea to be delivered in as few as two business days to markets such as Nigeria, Pakistan, Saudi Arabia and South Africa.

Global air cargo volume is up 12% for kết quả dữ liệu bongdaso first three quarters compared to 2023 and is expected to stay elevated in kết quả dữ liệu bongdaso final three months, according to freight data providers.

In September, UPS also expanded residential Saturday delivery to kết quả dữ liệu bongdaso eight largest markets in Europe without an additional charge.

UPS’s supply chain business improved revenues by 8%, primarily from growth in air and ocean forwarding and kết quả dữ liệu bongdaso onboarding of kết quả dữ liệu bongdaso U.S. Postal Service as a customer. UPS took over kết quả dữ liệu bongdaso Postal Service’s entire domestic air cargo contract on Oct. 1, but began to operate some routes over kết quả dữ liệu bongdaso summer to make sure kết quả dữ liệu bongdaso network was ready for kết quả dữ liệu bongdaso peak season. kết quả dữ liệu bongdaso migration of traffic from incumbent FedEx didn’t kick into gear until September. Management said fourth-quarter performance will be much better because daytime utilization of aircraft and trucks will be much higher with all kết quả dữ liệu bongdaso U.S. Postal Service volume now in kết quả dữ liệu bongdaso UPS system.

“Now that kết quả dữ liệu bongdaso volume is all in, kết quả dữ liệu bongdaso fourth quarter is going to look a lot different than kết quả dữ liệu bongdaso third quarter from a performance perspective,” Tome said.

With kết quả dữ liệu bongdaso Coyote and Postal Service moves “we eliminated a highly volatile truckload brokerage business and added air cargo volume that is predictable and margin positive,” said Tome.

UPS executed on its strategy of becoming kết quả dữ liệu bongdaso top provider of complex healthcare logistics services by announcing last month plans to acquire Germany-based Frigo-Trans, expanding its ability to provide integrated cold and frozen supply chain services for pharmaceutical customers in Europe. Frigo-Trans has a large network of temperature-controlled warehousing and trucking, as well as freight forwarding capabilities. kết quả dữ liệu bongdaso transaction is expected to close in kết quả dữ liệu bongdaso first quarter. In kết quả dữ liệu bongdaso third quarter, UPS generated .5 billion in consolidated healthcare revenue.

Source: https://www.freightwaves.com/news/ups-forecasts-softer-peak-shipping-season

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