Reporting on its fourth quarter, UPS indicated revenues in its supply chain and freight segment grew 7.6% over the same period in 2005. Forwarding and logistics revenues rose 13.3% while freight revenues (LTL) dropped 3.1%. UPS Freight operated at record service levels in the quarter and improved its freight mix by dropping unprofitable accounts. The overall tonnage decline in the LTL industry contributed to UPS Freight reporting a 6.3% drop in tonnage.
The outlook for the LTL unit is positive given its continued efforts to improve service levels and, according to analyst firm Stifel Nicolaus, there are now fewer, larger players in the market.