UPS celebrates strong volume growth

UPS celebrates strong volume growth

UPS has announced its fourth-quarter 2019 financial results which show strong volume growth in the U.S. Domestic segment though Export volume was slightly down .

For the total company in 4Q 2019:

  • Average daily volume levels exceeded 26.6 million packages, an increase of 7.5%, driven by high demand for air services in the U.S.
  • Consolidated revenue increased 3.6% to $20.6 billion, due to strong average daily volume growth during the peak holiday season.
  • Operating profit grew 6.4%, and 13.7% on an adjusted basis, with margin improvement across all segments.

“Our network improvements from transformation enabled UPS to embrace a surge in demand for air products while at the same time generate productivity improvements and positive operating leverage,” said David Abney, UPS chairman and CEO.  “Looking to 2020, we will continue to adapt to the changing environment, strengthen our network and create new solutions to support our strategic growth initiatives and help our customers grow and compete.”

U.S. Domestic Segment

The U.S. Domestic segment benefited from several transformation initiatives, including increased automated capacity and new aircraft added to the global air fleet, which positioned UPS to handle volume growth in each month of the quarter.  Total volume across all products grew nearly 9%.  Growth was driven by the structural shift to faster delivery in retail and  e-commerce, and from competitive wins.  UPS experienced growth from a number of large and SMB customers, with the growth led by UPS’s largest customer, Amazon.

“We processed record volume during the quarter as customers took full advantage of the capabilities of our integrated network and broad portfolio of solutions,” said Abney.  “Given the tremendous opportunities ahead, we have elected to implement SMB initiatives now to speed up our network and broaden our weekend operations, actions that will improve our competitiveness and generate growth.”

Export volume was down slightly as gains on intra-Europe, intra-Asia and U.S. export trade lanes did not fully offset the declines into and out of the U.K. and on the Asia-U.S. lane.

Operating profit increased more than 2%, and by 3.6% on an adjusted basis.

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