Atlanta-headquartered United Parcel Service (UPS) announced diluted earnings per share (EPS) of US$1.32 for the third quarter 2014, a 13.8 percent improvement over the prior year period as global shipments rise.
Operating profit increased 8.3 percent, resulting from balanced growth across all three segments.
The parcel delivery service also reaffirmed its full-year guidance for 2014.
UPS said its international revenue increased 5.5 percent to $3.2 billion on daily package growth of 6.7 percent. Export products jumped 9.4 percent with gains from all regions of the world. Shipments out of Asia grew 16 percent and Europe was up 14 percent.
International operating profit improved 10.3 percent to $460 million. Operating margin expanded 70 basis points over the prior year period, to 14.5 percent. Revenue and cost initiatives implemented during the quarter contributed to the margin improvements, said the logistics firm.
For its supply chain and freight services, revenue was up 7.4 percent to $2.4 billion, resulting primarily from growth in the distribution and freight business units. Operating profit was 7 percent higher at $215 million, and operating margin was 8.9 percent.
Forwarding revenue was higher primarily due to increased international air freight tonnage which was aided by high-tech product launches and government sector gains. Distribution revenue increased more than 10 percent over the same quarter last year. Strong demand from healthcare and retail sector customers contributed to the growth.
Freight revenue increased 7.9 percent to $810 million. Less-than-truckload shipments were 4.7 percent higher and revenue per hundredweight improved 1.1 percent. Operating profit and margin expanded from the third quarter last year.
For the upcoming holiday season, the company expects shipments delivered in December to climb 11 percent over the prior year. Earlier, the company announced it is committing an additional $175 million in operating expense and $500 million in capital expenditures to enhance its capabilities and prepare the network for peak and future volume growth.
“It’s encouraging to see all three segments show positive momentum, as we head into our busiest time of year,” said Kurt Kuehn, UPS chief financial officer. “We expect another robust peak season and are confident our network is prepared to operate at the highest level. As a result, we are reiterating our expectations for adjusted diluted earnings per share to be in a range of $4.90 to $5.00, a 7-to-9% increase over 2013 adjusted results.”
FedEx expands early delivery coverage
Tennessee-based compatriot FedEx Express, meanwhile, is broadening its early delivery service to 31 new origin markets to support efforts of global customers who need their critical deliveries to arrive as early as the start of the next business day.
The global express service provider said its “International First” service will now include Austria, Bahrain, Belize, Bolivia, China, Czech Republic, Denmark, Ecuador, El Salvador, Finland, French Guiana, Guyana, Honduras, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Nicaragua, Norway, Paraguay, Peru, Philippines, Portugal, Poland, Singapore, Suriname, Sweden, Thailand, and the United Arab Emirates.
“This expansion brings the total number of origin markets to 97, and means that customers can now use FedEx International First to ship packages from the above countries to any of the existing International First destination markets,” an official company release declared.
Depending on origin and destination, International First shipments arrive within one to three business days, often at the start of the business day. The service is most often used for business documents, electronic and high-tech equipment, medical devices, clinical trials, and gear for the entertainment industry—shipments that require delivery on a tight deadline.
“This latest ‘International First’ expansion highlights the FedEx commitment to serve our customers who need to ship critical, time-sensitive material. The expansion also aligns with our global growth strategy, and the need to stay ahead of customer demand,” said Raj Subramaniam, executive vice president for global strategy of communications and marketing division, FedEx Services.
DHL opens Japan-Europe multimodal service
On the other hand, DHL Global Forwarding has launched a North Asian multimodal service linking Japan to Europe through its existing rail service from China.
Using a combination of trucking, sea and rail solutions, the scheduled service reduces the delivery time by up to half to between 10 and 21 days compared to solely using ocean freight, and reduces costs by up to 85 percent compared to airfreight, the company said.
Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific, said, “We have established a North Asian multimodal network which connects the North Asian power houses—China and Japan—directly to any destination in Europe. Intra-Asia trade constitutes some 25% of Asia’s total exports due to the inter-connectedness of the supply chains in the region and Europe-Asia trade still constitute some of the region’s major trade flows.”
Photo: MobiusDaXter
