Package delivery giant UPS reported a 4.3 percent increase in first quarter revenue to $13.1 billion from $12.6 billion a year earlier.
The company’s operating profit rose 6.3 percent to $1.6 billion year-over-year, on a 4.3 percent increase in packages delivered, to 1 billion. The company attributed the gain to “rapid e-commerce growth and demand for lightweight shipping solutions.”
Operating profit in the company’s supply chain and freight segment spiked 19 percent to $166 million from a year earlier. Revenue in the segment increased only slightly because of excess capacity.
The company’s domestic revenue shot up 6.1 percent in the first quarter to $8 billion, on a 4.5 percent increase in daily volume growth. Operating profit was also up 13 percent in the same period year-over-year.
International revenue inched up 2.3 percent to $3 billion, in part due to increased export volume growth in Europe, intra-Asia and Mexico. However, operating margin dropped to 13.8 percent, in part because of increased fuel costs.
UPS this month launched an expedited ground freight service called UPS CrossBoarder Connect, linking Mexico and the U.S. in anticipation of higher freight traffic from customers moving manufacturing and distribution facilities to Mexico.
The service is a lower-priced alternative to air freight that will speed shipments from Mexico to the U.S. within two to four days, depending on origin and destination.
UPS last month acquired TNT Express, Europe’s second-largest package delivery company, in a $6.8 billion all-cash deal that will create the world’s biggest logistics group with more than $60 billion annual sales.
Contact Dana Brundage at email@example.com.