Despite Market Conditions, UPS Has Revenue Gains

While all of its operating segments showed increased revenues, UPS international package and supply chain and freight operations had particular strength. Overall while the company experienced a daily average of 15.1 million packages, the consolidated average revenue per piece grew 5.4%. Consolidated revenues for the quarter that ended March 1st were up 6.5% to $12.7 billion.

In commenting on the results, Scott Davis, UPS chairman and CEO, observed, “US economic activity deteriorated more rapidly than expected during the quarter. While we were extremely vigilant with respect to costs in this difficult environment, we will not lose our focus on growing the business. We will continue to invest in the infrastructure, new products and services that will enable our customers to succeed in the global marketplace.”

Within the International Package segment UPS observed a growth in US export volumes. This presented more balanced global performance with double-digit increases for Asian, European and US volumes. The company’s Supply Chain and Freight segment enjoyed an 11% climb in revenues. It attributes the 12.8% jump in Forwarding and Logistics revenues to new air freight offerings that began in January. The domestic freight squeeze meant a more modest gain of 4.1% for the less than truckload segment.

US Domestic Package revenues were hit by both a reduction in daily volumes as well as shippers shifting away from the use of UPS premium products. For example, volumes were down 3.8% for the Next Day Air product and 2.9% for Deferred. Ground revenues were up 0.3% for the quarter. Per piece revenues were steady for all levels while the consolidated revenue per piece grew 2.7%.

Prospects for the second quarter of 2008 are not bright, with no signs of economic strengthening seen by Kurt Kuehn, UPS chief financial officer. “Despite the current state of the US economy, the long term growth fundamentals of our industry and for UPS are very favorable,” he said. “Our international and supply chain businesses continue to offer great opportunity. In the US we’re positioning our small package business to weather this downturn and to be poised for economic recovery.”

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.