Wednesday 26th Oct 2016 - Logistics Manager

E-commerce boost for UPS

The growth in e-commerce played a key role in enabling UPS to increase volumes and profits in the first quarter. And the group revealed that it is back on the acquisition trail following its failed bid for TNT.

Average daily parcel volume for the three months to 31st March  rose to 16.2 million from 15.6 million in 2012. And operating profit was up from $1.57bn to $1.58bn.

“The quarter benefited from a stronger than expected post-holiday season in January as UPS e-commerce solutions resonated with customers,” the group said in the first quarter results.

During the quarter, UPS launched Access Point locations in the UK to serve the European retail e-commerce market. By the summer, it plans to have 1,500 sites for receiving UPS home deliveries and dropping off returns.

The international business saw rises in revenue and daily volumes but operating profit was down from $408m in 2012 to $352m. 

It said that much of this decline was accounted for by the charges relating to the attempted acquisition of TNT.

The business was also affected by moves to lighter weight packages and increased reliance on non-premium products.

* UPS is to buy Hungarian pharmaceuticals logistics company Cemelog increasing its reach in Central and Eastern Europe.

The deal, which is due to be completed in the second quarter, will add three sites totalling 255,000 sq ft to the UPS network.

“This acquisition is a continuation of our ongoing growth strategy across our business units and allows us to create innovative solutions for our customers that leverage UPS’s global network,” said Scott Davis, UPS chairman and chief executive officer.

“It will position us well to meet the needs of healthcare companies in a key geographic location as they strive to regionalise logistics operations as a way to increase efficiencies.”