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UPS disappoints for the 5th straight quarter - ShipRx
Blog / UPS reports a 5th consecutive quarterly decline
2 minutes read

UPS reports a 5th consecutive quarterly decline

It’s no secret that the parcel industry has experienced some major shakeups over the past few years. From scrambling to meet a COVID-era spike in e-commerce to dealing with reduced demand due today, the carriers haven’t had it easy. With so many changes in the industry and the world, it’s no surprise that UPS reported its 5th consecutive quarterly earnings decline in its Q1 2024 earnings call.

Is the decline solely a result of demand, or are there other factors influencing it?

While the entire industry has felt the global shift in e-commerce demand, UPS is still reeling from the threat of a Teamsters strike last summer. Customers shifted 1.2 million packages per day to other carriers amid the uncertainty. And once the Teamsters and UPS secured a deal, the increased labor cost became a factor in the carrier’s bottom line. UPS CEO Carol Tomé said, “Operating profit was $1.7 billion, down 31.5% compared to last year, due for the most part to higher labor costs associated with the first year of our Teamster’s contract.”

UPS is optimistic for the future. Here’s why.

As we told you last month, the United States Postal Service and FedEx decided to conclude its 20-year relationship this year. UPS stepped in, with Tomé saying, “The USPS air cargo business fits beautifully with our strategy to grow our B2B business. To win, we put together an innovative and differentiated solution that leverages our integrated network and existing assets.” This strategic move is a testament to UPS’s optimism and commitment to future growth.

Additionally, UPS is focusing on its “customer-first, people-led, innovation-driven strategy” to improve efficiency and drive growth. Knowing that 67% of online shoppers are considered “serial returners,” UPS appeals to those who need to make returns by streamlining the process with its no-box, no-label service, Happy Returns. And it’s working— the service more than quadrupled its ADV in the first quarter.

How can you benefit from UPS’ quarterly decline?

Despite a worse-than-expected Q1, UPS is undeterred. Tomé shared, “Our financial performance in the first quarter was in line with our expectations, and average daily volume in the U.S. showed improvement through the quarter. Looking ahead, we expect to return to volume and revenue growth.”

With an optimistic outlook, a partnership with USPS, and new strategies taking off, UPS CFO Brian Newman says the carrier aims “to grow revenue to be between $108 million and $114 billion by 2026.”

They need customers like you to lock in their contracts to reach their lofty goal.

Help UPS achieve its 2026 goal by renegotiating your UPS contract with the carrier and benefit your bottom line in the process.

ShipRx has helped thousands of customers renegotiate their contracts with a 100% success rate, and we know that there’s no better time than now to secure better contracts and more savings.

Get in touch for a free savings analysis and start seeing savings in just a few weeks.

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Brittany ShipRx Contributor
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