UPS struggles with economic slowdown, profits fall 9%
Earnings fell 9% at United Parcel Service + Inc., the world’s biggest package delivery company, as cost-conscious U.S. customers shipped fewer parcels in the second quarter
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UPS warns on third quarter as shipments decline
United Parcel Service warned on Thursday that its third-quarter earnings would miss Wall Street estimates as parcel shipments continue to decline in the wake of the US economic downturn. The world’s largest delivery company also reported its second-quarter earnings dropped, the company’s second consecutive quarter of falling earnings.
Read MoreAMID DEFICIT PROJECTIONS, (US)POSTAL SERVICE OFFERS BONUSES
The U.S. Postal Service is staring at a $2 billion deficit this year, yet the postmaster general has told its top managers they could see performance bonuses of up to 25 percent of their salaries. “This year our productivity is up,” Postmaster General John Potter said in a July 3 letter to 900 senior executives. “By pulling together, we can minimize our loss and earn additional pay for the performance achieved.” The USPS was criticized this year when it paid out $197 million in bonuses, or incentives, as the Postal Service calls them, despite a $199 million deficit for last year. But this would be the first time the agency, a self-supporting government monopoly, would be granting bonuses in the face of such monumental deficits.
Read MorePresentation by DMA at Direct Media Conference
H. Robert Wientzen, President and CEO, Direct Marketing Association (DMA), made a presentation at the Direct Media Client Summit and Co-Op conference, White Plains, N.Y. “First…let me begin with some statistics regarding the direct mail industry. The direct marketing industry generated $1.7 trillion dollars in sales last year…and direct mail drove $528 billion of that total…which was up 56 percent over sales in 1995. In five years…these sales are projected to approach $820 billion dollars. Now…as for direct mail ad expenditures…. Last year…organizations…for-profit as well as nonprofit…spent $44 billion dollars on ad expenditures relating to direct mail. And in five years…this spending is projected to hit $60 billion dollars. Significantly…the increase in direct mail ad expenditures has been less than the total increase in sales growth. Translated, mailers are taking steps to target their ads to more responsive audiences. Or, put another way, their ad dollars are working harder to generate better returns on investment. Now…all of this is pretty good news for our industry. However…that ‘rosiness’ is tempered by the current economic climate, and it’s tempered even more dramatically by the current state of the United States Postal Service,” Wientzen says.
Read MoreEND (US) POSTAL SERVICE'S MONOPOLY
The big problem with the Postal Service is not its policies of price rises and eliminating Saturday deliveries, the big problem is that it is a monopoly and that the government keeps it a monopoly by law. Call for privatisation.
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