1. Full-Year Earnings Outlook Lowered for UPS
UPS lowered its expectations for full-year revenue to $93 billion, down $4 billion from their Q1 projections. Operating margins have dropped as well as they account for new costs from their tentative Teamsters agreement. UPS estimates now that their full-year operating margin will be 11.8%, a 1% drop from earlier projections.
Notably, UPS’ Supply Chain Solutions unit saw a revenue drop of 23.4%.
Overall, UPS’ adjusted operating profit for the quarter was measured at $336 million – down from $517 million in the same quarter in 2022.
2. UPS Aims to Win Back Volume Lost to Strike Fears
In their recent earnings call, UPS executives shared that more volume was lost during their negotiations with the Teamsters than they’d expected. According to CEO Carol Tomé, FedEx, the USPS, and a mix of other regional carriers each took about one-third of the diverted volume.
UPS is promoting their strong on-time performance levels and their cost-effective SurePost service to try to win back volume. They’ve also set up a “control tower” to seamlessly onboard new volume.
Tomé believes all diverted volume can be regained by the end of the year.
3. Pitney Bowes Expands Regional Delivery Networks
Pitney Bowes has expanded their regional delivery service model to reach over 20 major cities in Southeast and Southwest. The network expansion will allow eCommerce shippers to reach an additional 100 million customers in 1-3 days in select ZIP codes.