As UPS seeks to remain a leader in delivering packages, there are a number of other big name carriers that are competing for market share position.  FedEx and the US Postal Service are both being aggressive for more revenue.  Recent numbers show that UPS sales did go up, but not a lot.

UPS’s second-quarter revenue slightly increased within its’ domestic and international package divisions.  The Washington Post reported details regarding about sales and other factors impacting where the industry is currently at right now.  Other companies are beginning to weigh in on the delivery industry, which is compelling UPS to think outside the box in order to keep growing.  UPS’s revenue went up to $14.63 billion, up from $14.1 billion. Analysts surveyed by Zacks Investment Research had an expectation of $14.6 billion in revenue.  Therefore, UPS did produce a little higher than forecasted.

The article also mentioned that the US domestic package unit increased 4%,along with average daily package volume up 2.5%.  Second quarter revenue figures rose 1.1% in the international package division and 3.9% for daily export packages.  For the three months ended June 30, UPS earned $1.27 billion.  This was higher than $1.23 billion the same period year over.  It may not be a huge increase, but it does sow that something’s being done right.

Online retail is impacting the package delivery industry as well.  Shoppers have become more comfortable with making online purchases, which in turn, increases revenue for carriers like UPS, FedEx and the USPS.  It also creates a higher demand for Same-Day Delivery, which e-retail giant Amazon has strategically implemented the service throughout the US.  The free service is available in San Francisco, San Diego, Seattle, Dallas, New York, Philadelphia, Chicago, Boston, Richmond, Orlando, Atlanta, and several other major city markets.  With 27 major cities already with same-day delivery, Amazon probably has its’ sights on more cities to come.

This provides insight on why Amazon has leased 40 cargo planes from Boeing and Atlas Air for the purpose of creating an air cargo network.  Amazon stated it doesn’t plan to build its’ own delivery service and is only looking to work closer with package-delivery services like the USPS, FedEx and UPS.  A move like this will have a wide affect on all three carriers, being Amazon uses them as delivery companies, which as a business partner, provides UPS a lot of business.

UPS is looking to shift along with today’s markets, even studying same-day delivery.  Earlier this year, UPS conducted a study on fast deliveries and led a $28 million funding round for start-up fast delivery company Deliv.  The article didn’t mention the investment size, yet it did state that UPS was taking a minority stake in Deliv and sits in on board meetings.  After doing the same types of deliveries for years, UPS sees it may be time to enter into some new markets to meet customers where they are.

Many companies are doing the same, even partnering with a Same-Day Courier like 1-800 Courier to launch same-day logistic solutions in major cities.  The Los Angeles Courier has a national footprint and the expertise to help any business become engaged in same-day delivery.  If UPS and Amazon are clearly improving its’ business product to increase revenue, other companies can take note and do the same.

Reference:  7.29.16, www.washingtonpost.com, Associated Press, UPS 2Q revenue improves on strength in US, abroad