UPS has announced its annual general rate increase for 2017, an average of 4.9% that goes into effect on Dec. 26. Other changes will be announced Nov. 18. See what else has changed in UPS rates and what this means in terms of its competition with FedEx.
UPS is continuing to push for increased efficiency through hub automation projects and its ORION route optimization system. The company reported Q2 revenue growth of 3.8% to $14.63 billion, with profit up 3.2% to $1.27 billion. Its ecommerce business is on pace to grow faster than expected through the end of the year, officials said, based on strength in U.S. consumer spending.
Driven by ecommerce demand and competitive pressure, UPS is testing Saturday delivery this summer, reportedly in Atlanta, Philadelphia and Los Angeles. The volume of shipments will determine continuation and future expansion of the service.
UPS executives said they will continue to place a $1 billion bet on new technology each year, including major investments in facility automation, robotics and even drones to conduct tasks such as aircraft inspections and inventory counts. See what else the company disclosed about its strategy and operations during media day at its Atlanta headquarters.
Smaller merchants doing business in Canada are getting product out the door and setting up contingencies in anticipation of a possible Canada Post strike. See what options are available, and what impact the work stoppage could have.
FedEx’s continued focus on ecommerce growth, reflected in its capital spending and recent spate of acquisitions, paid dividends in fiscal 2016, especially the 20% growth in ground revenue. Walmart’s recent addition of a subscription service in response to Amazon Prime, partially served by regional carriers, is not a concern, company executives said.
Amazon doesn’t need to take over the last mile of ecommerce delivery, but it does need to reduce its massive shipping cost burden in order to maintain its recent run of profitability, which is the logic behind its recent logistics moves.
As increased shipping costs for bulky items mount, does this spell the end of the line for ordering big-ticket items online? Certainly not, and here are some options that shippers can consider to address the issue.
The U.S. Postal Service reported operating revenue of $17.7 billion in Q2, up $788 million or 4.7% from 2015. The increase was primarily due to an 11.4% gain in shipping and package volume and pricing changes. While the USPS keeps posting double-digit parcel gains, it continues to drown in pension-driven red ink, with a $2 billion quarterly net loss, up from $1.5 billion a year ago.
Following on the heels of FedEx’s move earlier this year, UPS plans to update its fee structure for larger parcels, decreasing the size of items that incur an extra $10.50 handling charge. Under the new rule, packages with a long side of 48″ or more will be subject to the charge as of June 6. The previous threshold was 60″.