Parcel Profits Slumping

From the Wall Street Journal: Transportation operators are struggling to realign their networks to the big swings in shipping demand.

The challenge is evident at United Parcel Service Inc. as the delivery giant slashes its capital spending by $1 billion and takes other measures to conserve cash, the WSJ’s Paul Ziobro reports, even though revenues and volumes in the company’s U.S. package business surged in the first three months of the year.

The growth included a nearly 70% gain in home deliveries during the quarter, a surge driven by the rush toward e-commerce under coronavirus-driven restrictions on business. That has cut deeply into UPS’s margins because those parcels are more costly to handle than business-to-business volumes, a key reason the company’s first-quarter profit sank 13% from a year ago.

Source: WSJ Logistics Report

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