UPS sees growth despite higher fuel costs, prices
United Parcel Service Inc. (UPS.N: Quote, Profile, Research) , the world’s largest package delivery company, expects business to keep growing even as it passes higher fuel costs on to customers, its chief executive told a newspaper.
“So far we have detected no signs that business is declining,” Michael Eskew said in a interview to be published in Thursday’s Financial Times Deutschland.
Sales volume has not dipped, he said, even though UPS is passing on higher fuel costs directly to clients and airmail packages have become 7.5 percent more expensive to send.
Rival Fedex (FDX.N: Quote, Profile, Research) told Reuters in an interview earlier this week that escalating fuel costs are no threat to its business as they are being offset by higher productivity and efficiency.
Over the long term, Eskew predicted continued growth in the parcel delivery industry as individual customers buy more goods on the Internet and firms seek to reduce inventories by dispatching smaller amounts rather shipping entire containers at a time.
“Forty years ago around 2 percent of all ordered goods were shipped in small packages. Today it’s 12 percent. This increase will continue,” he said.
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