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″.
Continuing its relentless push into logistics to shore up carrier network capacity issues, Amazon has struck a deal with major air transport firm Atlas Air of Purchase, NY, leasing 20 of its Boeing 767-300 jets and taking up to a 30% stake in the company. Atlas is also a supplier of transport planes to UPS.
A final hurdle to FedEx’s proposed $4.8 billion acquisition of Dutch carrier TNT Express NV has been cleared via an unconditional approval from the Chinese Ministry of Commerce. The deal has already been blessed by authorities in the EU and Brazil, after an initial challenge last fall by the former. The deal will bring FedEx close to parity with UPS in Europe, or possibly launch it into second place behind EU market leader DHL.
UPS reported 10% growth in Q1 net income, as the company touted its ability to drive efficiency in its ecommerce operations and strong B2C volume gains. See what executives said about UPS’s investment in Deliv and logistics moves by major customer Amazon.
When does it make sense for a company to engage in same-day delivery? We caught up with Jason Acevedeo, senior director ecommerce operations at Limited Stores, at Operations Summit 2016 in Cincinnati to ask him for his thoughts. Find out how knowing your audience, their demograpics and location, and the type of products you sell all play a part.
Next month Amazon plans to offer Prime Now via its website, significantly increase the reach of the service which until now was limited to access via its mobile app.
American Apparel has begun offering one-hour delivery through a partnership with Postmates, leveraging RFID technology to provide real-time inventory availability via the Postmates Order app. The program is in place at 79 stores in 31 U.S. markets, making 50 “on-demand basics” items like hoodies, t-shirts and socks available to consumers who desire the items right now.
FedEx told analysts on a third quarter call that Amazon was simply addressing capacity issues with its own assets a la other major retailers, so they weren’t worried about the business. For the quarter, FedEx’s net income fell 19% to $507 million, while Ground revenue was up 30% to $4.41 billion. However higher costs due in part to network expansion and peak season demand caused the segment’s operating income to drop from $559 million to $557 million.
In the global shipping and logistics business, the unforeseen is the norm, and as some brands are learning the hard way. That’s especially true in China, where total online retail spending is forecast to climb above $1 trillion by 2019. Despite these issues, China holds more than enough business opportunities to offset them.