10/25/13

UPS expects to ship 8% more packages during the holiday season peak

Its Q3 revenue grew 3.4%, thanks partly to U.S. e-commerce.

Amy Dusto , Associate Editor

Shipping carrier United Parcel Service of America Inc. anticipates this year’s holiday season will be its biggest yet, with five days of shipping volumes higher than that on its busiest day in in the fourth quarter of 2012.

UPS made the prediction today as it reported its third quarter results. UPS said revenue increased 3.4% year over year in the third quarter, to $13.52 billion from $13.07 billion in Q3 2012. Domestic revenue increased 5.0%, to $8.25 million from $7.86 million in Q3 2012.

U.S. e-commerce drove that growth, along with shipments exported from Europe, which were up nearly 10% year over year, UPS says. In the third quarter, the carrier delivered 2.3% more packages domestically year over year, thanks to a 5% increase in business-to-consumer shipments and growth in business-to-business shipments as well, primarily from retailers, UPS’ chief financial officer Kurt Kuehn told investors in an earnings call this morning. He did not give an exact figure for B2B growth. UPS also delivered 6.3% more packages domestically in countries outside of the United States than it did in the same period last year.

For the upcoming holidays, UPS predicts that online sales will increase 13% to 15%, helping to boost its shipping package volume by 3% to 5% during the holidays, Alan Gershenhorn, senior vice president of worldwide sales, marketing and strategy, said during the call. The company also expects its daily shipping volume to be up by 8% year over year on average during the busiest days of the season, and that it will ship 34 million packages globally on its peak day, predicted to be Dec. 16. Last year, UPS’ peak day was Dec. 20, when it shipped more than 28 million packages worldwide.

For the three months ended Sept. 30, UPS also reports:

In the third quarter, UPS also expanded its retail operations in Northern Mexico, helping bring manufactured goods from that country into the United States more easily, the company says.

For the year to date, UPS reports:

UPS ranks first among shipping carriers in Internet Retailer’s Leading Vendors to the Top 1000 E-Retailers guide. 161 retailers in the Top 500 and 251in the Second 500 use UPS.

Topics:

e-commerce earnings, fulfillment and delivery, holiday shopping, international e-commerce, UPS, Vendor financials

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