1. Parcel Shippers To Diversify Carrier Mixes in 2023
Rate increases, past capacity issues, and labor concerns are all combining to drive parcel shippers towards more diverse carrier mixes. Industry experts have recommended this in recent years, and data is showing that shippers are adding new carrier accounts at higher rates.
Regional and alternative last-mile carriers are expanding their capabilities, making them increasingly attractive options. Sifted Chief Growth Officer Caleb Nelson explains that regional carriers “have stepped in to offer competitive solutions to FedEx and UPS are far more advanced this year than they’ve ever been before.”
2. Despite Pandemic Success, Threat of UPS Labor Strike Looms
In June 2020, UPS CEO Carol Tomé brought a “better not bigger” mantra to the company, meaning an increased focus on efficiency, rather than sheer volume. The approach led UPS to massive success throughout the pandemic, with stock shares rising from around $110 in 2020 to a peak of $225 in 2022.
However, Tomé’s biggest challenge may still be on the horizon, with UPS’ Teamsters union, which represents roughly 350,000 employees, threatening to strike in the summer if their bargaining agreement renegotiations aren’t satisfactory. Teamsters President Sean O’Brien has openly threatened a strike, and has established a $350,000,000 fund to pay Teamsters members in the event of a strike.
3. UPS Feeder Airline Buying 20 Pilotless Cargo Planes
Ameriflight, a feeder airline for UPS and other overnight delivery carriers, has tentatively committed to buying 20 pilotless cargo jets designed for middle-mile deliveries. According to the manufacturer Natilus, the aircraft will increase cargo volume by 60% and cut emissions in half. The lack of a pilot and a carbon-fiber body allow for more usable cargo space and better aerodynamics, an innovation that can lead to more affordable and sustainable air shipments. Ram Menen, advisor to Natilus, notes that the new planes are “very ecommerce friendly and ideal for low density cargo.”