USPS stats put FedEx & UPS at risk
The number of parcels and packages that postal workers are toting around the country has declined sharply, according to government statistics, opening the prospect of fresh liabilities for the U.S. Postal Service’s private-enterprise rivals, analysts said.
According to the data, challenging economic conditions, the end of stimulus checks, and inflation in fuel prices have contributed to a pronounced sell off in package deliveries. Express mail shipments fell 14 pct in the quarter that ended in June, the most recent data available. Priority mail shipments declined 6 pct in the period. The pullback could have direct implications for FedEx, which has made as much as USD1.2 billion a year flying priority mail packages for the USPS. But there are threats to the franchises of FedEx as well as United Parcel Service (UPS) simply from industry pressures. The USPS data suggested that package shippers have gotten more cost-conscious about their shipping activities. FedEx’s May quarter showed that daily domestic air freight declined about 15 pct, including its priority shipping business. Nevertheless, both FedEx and UPS have ticked up about 1 pct in Wednesday’s trading (27th August).
