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GMT’s Shipped Monthly unboxes the latest Parcel and LTL industry news each month! Don't forget to subscribe to our newsletter to get the latest updates right from your Inbox.
PARCEL CARRIER NEWS
- FedEx founder and CEO, Fred Smith, announced that he will step down from his current role and become an Executive Chairman effective June 1, 2022. Current FedEx President and COO, Raj Subramaniam, will succeed Mr. Smith. In his new role, Mr. Smith says he will continue to serve FedEx and help shape its future path by “focusing on Board governance as well as issues of global importance, including sustainability, innovation, and public policy.” Read the complete announcement.
- The carrier announced a new fuel surcharge in response to increasing and uncertain negative influences on the global economy, citing the war in the Ukraine particularly. See all FedEx Fuel Surcharges.
- The carrier also announced another quarter of positive growth. Notable highlights include:
- Total Revenue: $23.6B (+10% YoY)
- Adjusted Operating Margin: 6.2% (+130 bp YoY)
- Adjusted Net Income: $1.2B (+30% YoY)
- Adjusted Diluted EPS: $4.59 (+32% YoY)
- Revenue per Ground package was notably up 19% YoY.
- View the full quarterly earnings report.
- The carrier is reportedly testing 100 “eQuad” bikes, which are four-wheeled electric cargo bicycles capable of hauling up to 441 pounds with a 15.5 mph top speed and a reported 40 mile electric battery range. The eQuads serve a dual purpose for the carrier: 1) helping UPS make good on carbon footprint reduction commitments, and 2) helping to speed up last-mile delivery in densely packed cities, as the eQuad legally fits into bike lanes and pedestrian zones that traditional delivery vehicles cannot.
- The carrier reached a $5.3 million settlement with the USPS regarding disagreement over services rendered by UPS on behalf of the USPS. After being hired by the USPS to pickup and deliver mail at several domestic and international locations, the USPS believes UPS submitted false delivery scans. Despite the settlement agreement, UPS has not admitted any wrongdoing on their part.
GRI & SURCHARGES
- FedEx increased its fuel surcharge index effective April 4, 2022. The increases were as follows: Domestic Express and Ground +1.75%; Domestic Express Freight +$0.028; US Export +2.5%; US Import +3.5%; and, FedEx Freight is changing it’s increase cadence from 0.1% change for every $0.02 to 0.1% change for every $0.01.
- FedEx Canada
- On April 4, 2022 FedEx Canada implemented a new fuel surcharge index for Express Canadian-Export and Canadian-Import shipments. They also implemented a new fuel surcharge index for Ground International Canada to U.S. and U.S. to Canada shipments.
- Effective March 21, 2022 the Fuel Surcharge for International Air-Export and International Air-Import services changed.
- Also effective March 21, 2022 UPS Ground fuel became based on the National U.S. Average On Highway Diesel Fuel Price as most recently reported by the U.S. Energy Information Administration. This essentially made the UPS Ground fuel a 7-day look back rather than a 14 day look back.
- Effective April 11, 2022 the fuel index for domestic UPS Ground will increase by 1.75%, and the fuel index for domestic UPS Air will also increase by 1.75%.
- Effective May 9, 2022 the Fuel Surcharge index for OnTrac will change. The thresholds are increasing another 1.75% from the February 2022 change.
LTL Carrier NEWS
- Pitt Ohio’s Executive VP and CMO, Geoff Muessig, believes that acquisitions in the LTL market have become a lifeline for LTL carriers lacking employees, equipment, facilities, land, and time – acquiring a company could be the difference between receiving these much needed resources. Another cost inflation mitigation tactic for Pitt Ohio? Digitization. The LTL carrier has “set a goal of digitizing 85% of its bills-of-lading… [which is] currently at 25%.”
- Speaking of digitization, dynamic pricing continues to be a growing area of interest for the LTL market. Particularly as industry leaders seek to create more consistent pricing methods vs. less reliable methods like assumptions and averages.
- Logistics Management has identified the Top 50 Trucking Carriers, and they think more accurate pricing – as well as consistently charging for services – is key for those rising to the top. “Analysts say that the best, most profitable trucking companies are that way because they price their services—all of them, including accessorials such as inside delivery or specialized handling—correctly and accurately. Such accessorials used to be about 5% of revenue in the $46 billion LTL sector. They’re now close to 10%, a sign of overall health of the LTL sector which collectively posted an 85 operating ratio (OR) last year.”
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