- As customers migrate online, commercial deliveries down 8.9% in March
- Daily avg. volume for ecommerce & healthcare up 8.5%
- B2C accounts for 70% of volume in March and through April
- Net income down $200M; coronavirus impact of $140M
- UPS is focusing on strategic growth imperatives for ecommerce & healthcare
- SMBs remain a priority, speeding time in transit
- Overall volume down 8.5% in April
UPS kicked off their quarterly earnings call by acknowledging the incredible impact the ongoing Covid-19 pandemic has had on them, and focused on efforts they’ve taken to keep employees safe as the world continues to rely on their services.
UPS addressed the dramatic shift in consumer shopping behavior it has seen as customers migrate to online shipping. Although commercial deliveries were down 8.9% in March, average daily volume was up 8.5% in ecommerce and healthcare. B2C accounted for 70% of the carrier’s volume by the end of March (and continues to be 70% through today), with average package weight decreasing 1/3 lbs. and delivery density declining overall. As a result, UPS will focus on strategic growth imperatives for ecommerce and healthcare, and SMBs will remain a priority as the carrier is making efforts to speed up time in transit. Overall, UPS reports their net income as down $200m, attributing $140m to coronavirus impact.
On the international front, UPS is adding capacity for China as they recover. International volume was down 8.5% in March (mainly in the EU) after seeing some growth in January and February. UPS estimated the international operating profit impact of the coronavirus to be $70m. In April, UPS is seeing Asia stabilizing as the EU transitions.
With all volume down 8.5% in April and uncertainties still causes by Covid-19, UPS withdrew its 2020 guidance, unable to predict the business impact of the pandemic and estimate financials for future quarters. The carrier also hesitated to give guidance on pricing. Carol Tomé, Chief Executive Officer Elect, will assume the role of UPS’s CEO on June 1st as current CEO, David Abney, steps down.
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