UPS hit by economic slowdown

LinkedIn +

UPS has reported a moderate rise of £7m in its 2nd quarter results, however shares in the US parcel giant fell by 15 per cent amid warnings of a poor outlook for the rest of 2006. UPS has seen a rise from £18.5m in 2005 to £25.5m in operating profit from its supply chain and freight sector.

A spokesperson for UPS said: “The international segment’s growth is unusually low at 4.3 per cent, but that’s only because there were three fewer operating days in Europe during the period compared to the prior year.”

He also went on to say “The other factor that depressed our operating profit growth was the sudden jump we encountered in diesel and jet fuel during the quarter. We have a fuel surcharge on shipping right now, but it lags changes in fuel prices by 45 days. So the sudden run-up had not been predicted and actually cost us $25 million in extra expense that we had not forecast.”

Share this story: