Resource Center/Article • 10/14/2021

Braced for Peak Season, Industry Can’t Help But Eye 2022

The industry is ready for peak season, but everyone is waiting for what comes after – waiting to see how the industry and carriers change.

???? Oct 13, 2021: The White House announced plans to expedite traffic in U.S. ports and increase capacity for carriers and retailers alike. A key component is the intention of FedEx, UPS, and Walmart to move to 24/7 operations. Learn more about the plan: https://n.pr/3vawXOj
???? Recently announced: Lasership will acquire OnTrac for $1.3B, combining the two shipping networks for coast-to-coast support across the U.S – with the intention to seriously compete against FedEx, UPS, and USPS. Links: https://bit.ly/3DFvhj8 and https://bit.ly/3p1SEPD

PARCEL CARRIER NEWS

???? The following peak season surcharges go into effect beginning 10/4/21: Additional Handling, Oversize & Ground Unauthorized Package
???? Peak surcharges for Ground Economy and Residential Shipments begin 11/1/21. The existing $0.60 Residential surcharge will resume 1/17/22.
The carrier released its Q1 2022 Earnings report on Tuesday, September 21. Here are the highlights:
Revenue $22B, + 13.9%
Net Income $1.1B, -10.7%
Net Profit Margin 5.05%, -21.58%
Total US domestic package volumes increased YOY by 1.5%
Express: +7% YOY
Ground: Flat
Residential volume mix 57% vs. 62% in Q1 2021
???? Labor drove $450M in increased expense last quarter ($200M in wages & purchased transportation rates, $250M in network inefficiencies)
Ground package handler hourly rate up 16% YOY
Express sorting hourly rate up 25% YOY
Inefficiencies with staffing across the network are re-routing an estimated 600K packages/day
???? On Peak Season, carrier referenced intention to use pricing as a tool to manage capacity and a focus on protecting high-yield commercial segments.
???? Carrier expects 12% US Parcel market growth (up to 101M packages/day). Expected growth by segment: 1) Commercial, 2) Home Delivery, and 3) Economy.
Carrier also announced plan to make a $500M voluntary contribution to pension plan.
Find more information about FedEx surcharges, including peak season surcharges.

???? Sep 10, 2021: UPS announced entering agreement to acquire Roadie, a crowdsourcing Same-Day delivery company with prominent clients like The Home Depot.
Roadie was founded in 2014 by CEO Marc Gorlin (???? hey, Marc). The company will exist as a wholly-owned subsidiary of UPS.
Roadie often provides service for shipments not compatible with UPS’s network due to their size and perishable nature, typically moved and delivered in shopping bags.
The carrier noted that Roadie’s technology platform will provide opportunities to improve existing (and potentially add additional) small package capabilities.
???? This acquisition puts UPS in the Same-Day delivery market with competitors like DoorDash and Instacart.
Neither company has disclosed financial terms of the acquisition. The transaction is expected to officially close “in the fourth quarter of 2021”, though perhaps it’s already closed.

???? Amazon rolls out ‘Black Friday-worthy deals’ earlier than ever, kicking off holiday shopping. “Customers can confidently shop early knowing they are receiving incredible deals starting today, letting them get a head start on their holiday to-do lists so they can truly enjoy the holiday season,” said Dave Clark, CEO of Worldwide Consumer at Amazon. Link: https://bit.ly/3lCrxZm

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