1. UPS Q4 Earnings Don’t Meet Expectations
In an earnings call on Tuesday, January 31, UPS reported Q4 earnings that underperformed Wall Street’s expectations, and declined compared to the same period last year.
The performance is likely the result of normalizing shipping volumes. On the call, CFO Brian Newman said the company is expecting a “bumpy” 2023. However, they expect the second half of the year to be better, with a projection that 56% of their 2023 profits will come in H2.
2. UPS CEO Optimistic Ahead of Labor Negotiations
In the same earnings call, UPS CEO Carol Tomé shared that UPS and the Teamsters labor union aren’t far apart on key issues in their upcoming negotiations. In an earnings call last week she shared that they believe “with just a few tweaks to our current contract, we can work this out.” UPS reportedly sees eye-to-eye with Teamsters on labor limitations, hoping to limit six-day workweeks.
Should an agreement not be reached by July 31, Teamsters is poised to strike, which would leave UPS short of roughly 350,000 workers.
3. FedEx Announces 10% Reduction to Global Officer and Director Workforce
On Wednesday, February 1, FedEx CEO Raj Subramaniam announced in an internal memo that the company would be reducing the size of its global officer and director workforce by at least 10%.
The move will affect relatively few employees, as the global officer and director level only consists of about 100 employees. However, it’s striking those who were believed to have secure positions, and will undoubtedly send ripples throughout the organization as lower-level employees see their roles and responsibilities adjust.
The reductions are part of a plan to reduce 12,000 jobs in order to streamline the business since the start of the 2023 Fiscal Year, and just another step in a pattern of cost-cutting operations since FedEx reported subpar Q1 earnings in September.
4. FedEx Ending SameDay City Service
What was once billed as the “fastest local shipping option” is now being eliminated by FedEx in another cost-reduction measure. Offered by FedEx Office, the service was designed to serve businesses requiring same-day delivery of critical items, such as those in healthcare or automotive industries, when shipping to a destination within the same metro area.
SameDay City services will continue through March 31, when all positions supporting the service will be terminated.
5. FedEx Agreement With Shippo Brings Discounts to Smaller Shippers
Larger discounts are typically reserved for high-volume shippers. However, smaller businesses who utilize Shippo’s shipping operations services can now enjoy discounted FedEx rates.
Shippo previously required users to have their own FedEx account to ship with FedEx through their platform. The new agreement grants Shippo a Platform Account with FedEx, meaning Shippo users can now ship through that account and enjoy the associated discounts.
The partnership is a strategic move from FedEx to attract more business as they battle normalizing volumes.