United Parcel Service, Atlanta, warned that its first quarter earnings would likely be 10% lower than first quarter 2000. The company attributed the falloff to the slowing U.S. economy, higher utility costs, weakness in the Euro, and lower cargo revenue.
UPS, which moves 13 million packages a day, started to see a slowdown just after Thanksgiving 2000. In December, the number of parcels shipped was similar to that shipped in December 1999, but the company had expected growth of between 4%-5%, UPS spokesperson Kurt Kuehn told DIRECT Newsline.
January 2001 volume was up 3% compared with a year ago as well, but in January 2000 UPS saw lessened volumes due to Y2K concerns, Kuehn said. Preliminary results for February and March of this year show increases of 1% over last year’s levels.
Where the company has seen strength is in its international cross-border shipping, which makes up 3% of its volume, but 10% of its revenue. Growth in this segment is anticipated to be 15% over last year’s level. Domestic shipping in non-US countries should experience “mid- to upper-single-digit growth,” according to Keuhn.
Globally, between 20%-25% of UPS’ volume is business to consumer, with the remainder comprised of business to business shipping. Consumer to consumer parcels, which are not broken out, make up a comparatively small percentage of the shipper’s business.
