Supply chain margin boost for UPS

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Last quarter, UPS unveiled an advertising campaign with the theme “We Love Logistics” – and it’s easy to see why after the group’s supply chain division unveiled an increase in operating margin from 5.5 per cent to 8 per cent for the third quarter.

The campaign is UPS’s first coordinated global advertising effort and the group says it is designed to demonstrate the power of logistics to businesses around the world.

Margin expansion in the supply chain division was driven by improved revenue management, increased tonnage and improved operational efficiencies in forwarding and logistics.

Sales were up 19 per cent to $2.23bn but operating profit was 74 per cent higher at £177m.

UPS Freight revenue grew 14 per cent as a result of improved yield and increases in gross weight hauled.

During the quarter, UPS launched Preferred LCL Ocean Freight, which promises up to 20 per cent faster door-to-door delivery than other less-than-container-load services on the market.

The group saw margin improvement in both its international and US domestic parcels businesses.

As a result total group adjusted operating profit increased 77 per cent to $911 million on revenue growth of six per cent.

Chairman and chief executive Scott Davis said: “UPS once again exceeded expectations due to superior execution across all business units and our ability to provide solutions that create value for our customers.”

The group is raising its full-year 2010 guidance with adjusted earnings per share expected to grow more than 50 per cent over last year.


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