UPS ‘won back’ most of the business it lost to during labor talks, disputing FedEx’s claim

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By Blegug Nan

‘By the end of December, we had won back and pulled through nearly 60% of the volume diverted during our labor negotiation.’

— UPS Chief Executive Carol Tomé

That, from a FactSet transcript of United Parcel Service Inc.’s fourth-quarter earnings call Tuesday, appears to be UPS Chief Executive Carol Tomé’s way of saying you shouldn’t believe rival FedEx Corp.’s recent claims on how much of the market share it gained that it still has.

In August, Tomé acknowledged that “late and loud” negotiations between UPS UPS, -7.13% and the Teamsters union had led to the more customers than expected going elsewhere to ship their goods. That labor friction, FedEx Chief Customer Officer Brie Carere said last summer, had “opened a lot of doors” to take share from UPS.

Then, during FedEx’s FDX, -1.46% conference call with analysts in December following its fiscal second-quarter results, Carere noted that the question she gets asked the most is whether FedEx was “holding on to all of the share” that it had taken from UPS.

“[T]he answer I can give you is confidently yes,” Carere said, according to an AlphaSense transcript.

FedEx Chief Customer Officer Brie Carere.

FedEx Corp.

On Tuesday, UPS Chief Financial Officer Brian Newman said that in the company’s U.S. domestic business, the efforts it had made to win back diverted volume and to pull through new volume “resulted in a record sequential volume surge.”

Don’t miss: UPS to cut 12,000 jobs, as 2024 revenue outlook disappoints.

The company reported fourth-quarter U.S. domestic-package volume of 22.45 million units, up 30% from third-quarter volume of 17.29 million units.

FedEx, by contrast, reported last month that its U.S. average daily domestic-package volume for the quarter ended Nov. 30 was 2.69 million units, up from 2.65 million in the previous quarter.

UPS’s stock sank 6.8% in afternoon trading Tuesday, as its fourth-quarter revenue and 2024 outlook were below Wall Street forecasts.

Still, UPS shares have gained 6.1% over the past three months to outperform FedEx’s stock, which has tacked on 3.3% in that time.


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