UPS Encourages Shippers to Find Alternatives Amid Tight Capacity Ahead of Peak – Supply Chain Dive

We want to keep you informed on the latest market updates and news. Below is a summary of an article from SupplyChainDive.com regarding parcel shipping services through UPS and FedEx during the month of December:

UPS is encouraging customers to bring holiday volume forward and even avoid shipping when possible, as the carrier faces a hectic peak season. "We work with our customers to help them rethink their operations via buy online pick up in-store, different timing for their promotions and different availability of their packages," UPS CEO Carol Tomé said on a Wednesday earnings call. UPS domestic volume was up nearly 14% YoY in Q3.

Tomé has emphasized since she took the helm in June that UPS will use pricing and surcharges to navigate the e-commerce boom brought on by the pandemic. "There is a shift in certain customers who are more price-sensitive than others," she said. "We're okay with that." Domestic cost per piece was up 4.4% YoY in Q3 while revenue per piece increased 2.5% YoY in the same period. Adjusted operating profit in the U.S. domestic package market declined by 8.8%.

UPS and the other major parcel carriers levied surcharges or raised prices since the beginning of the pandemic — reflecting the lack of capacity in the parcel market. "Really what we're hearing is all of these

carriers, they are not accepting any new customers through the end of the year," Convey Founder Dan Bebout said in a webinar Tuesday. Customers need to be preparing their end customers for delays and issues that are going to be coming their way. 7,000,000 packages aren't going to be delivered, how have they prepared their customers for that?

Read the full article here: UPS Encourages Shippers to Find Alternatives Amid Tight Capacity Ahead of Peak