Recent news in the parcel industry paints a picture of declining demand and clients choosing cheaper shipping options over fast delivery. So UPS's recent Q3 earnings report surprised everyone when the carrier surpassed Wall Street estimates, announcing a 5.6% increase in consolidated revenue from the third quarter of 2023.

In today's blog post, we'll assess the earnings report to discover how UPS increased its earnings and what that means for shippers in the coming months and years.

The results: UPS Q3 earnings report

On October 24, 2024, UPS released its Q3 earnings report. In it, the carrier shared consolidated revenues of $22.2 billion— up from $21.1 billion during the same period in 2023. Its consolidated operating profit for Q3, up 22.8% over last year, was $2.0 billion. During the Q3 earnings call, UPS CEO Carol Tomé shared, "In the US, this was the second consecutive quarter of average daily volume growth, and it was our highest year-over-year ADV growth rate since the first quarter of 2021."

She also reminded callers, "We said that the second quarter would not only be the bottom, but a turning point for our performance and that we would return to revenue and profit growth in the third quarter, which we did."

How they did it

A variety of factors impacted UPS's increase in revenue. Among them were selling Coyote Logistics, managing costs, growing B2B volume, focusing on productivity and efficiency, and onboarding the USPS air cargo business— completed on October 1.

Regarding efficiency, Tomé said, "This year on our peak day, which is December 18th in the US we expect to deliver 2 million more packages than we did on peak day last year, but we'll do it at a higher productivity rate." In short— UPS doesn't think the Q3 increases were a fluke. They're prepared to continue delivering results.

The future: how increased earnings affect you

Given the Q3 report, UPS has increased its full-year operating margin forecast and announced that it expects its consolidated revenue to be $91.1 billion.

Because of declining shipping volumes and decreased revenues post-2020, the shippers have recently had the upper hand in contract negotiations. Despite increased surcharges and demand fees, both UPS and FedEx showed leniency to keep customers. If revenue continues to rise, carriers will gain the advantage in negotiations.

The one thing you need to do now

If you haven't recently negotiated your contract with the help of shipping experts, now is the time to do it.

The team at ShipRx has decades of experience in the shipping industry— first working for the carriers and now using that insight to lower shipping costs for businesses just like yours. Our customers typically see 20-30% savings, and getting started is free. You'll only pay for our services once you're saving money.

There's never been a better time to save. Sign up for a savings analysis before earnings shift even more in the carriers' favor and see savings before the end of the year.