UPS global volumes up 20.9% in Q2

Average daily volumes at UPS were up 20.9% year-on-year during a second quarter of the year that was defined by the global impact of the Covid-19 pandemic.

Turnover in the second quarter increased 13.4% year-on-year to $20.5 billion (£15.7 billion) while operating profit rose 7.4% year-on-year to $2.3 billion.

UPS chief executive officer Carol Tomé said: “Our results were better than we expected, driven in part by the changes in demand that emerged from the pandemic, including a surge in residential volume, Covid-19 related healthcare shipments and strong outbound demand from Asia.”

By division, US domestic package saw the highest increase in Q2, with turnover up 17.3% to $13 billion but margins were impacted with operating profit falling 0.9% to $1.2 billion.

UPS said that average daily volumes in this division increased 22.8%, reaching 21.1 million packages per day, while demand for residential delivery surged in the quarter, driving B2C shipment growth up 65.2%.

Turnover in International Package rose 5.7% year-on-year to $3.7 billion, with operating profit up 26.6% to $842 million. Here UPS said that average daily volumes grew 9.8%, driven by strong outbound demand from Asia and an increase in cross-border e-commerce in Europe.

In supply chain and freight turnover rose 8.5% to $3.6 billion, but operating profit fell 2.2% to $267 million. UPS said that turnover was driven by elevated air freight forwarding demand out of Asia, but was offset in part by weaker demand early in the quarter in the LTL and truckload brokerage units.

UPS chief financial officer Brian Newman said: “Using the scale and flexibility of our global integrated network, we successfully managed operational challenges throughout the quarter.  Moving forward we are focusing on efficiency and revenue quality to improve U.S. operating margins longer term.”