Company Reports

United Parcel Service has inked an agreement to sell its asset-light truck brokerage division, Coyote Logistics, for roughly $1 billion in cash to logistics firm RXO, which was spun off from XPO in late 2022. The announcement isn't a surprise, as UPS disclosed earlier this year that it was pursuing strategic alternatives for the segment. We had agreed with management's decision to put Coyote up for sale, since the business always felt a bit off purpose for UPS as a unionized global parcel delivery specialist. UPS acquired Coyote in 2015 for around $1.8 billion.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major US incumbents, while DHL Express leads in Europe. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS' first-quarter top line fell 5% year over year, though volume declines eased in the quarter and revenue was mostly in line with our expectations. Management was up front at its March investor day that first-half package volume and margins would remain pressured but with year-over-year growth returning in the second half. Relative to first-quarter 2023, lower revenue stems from lingering US and international package volume declines and the soft demand and pricing backdrop for truck brokerage (Coyote) and global forwarding. Base rates on package business remained positive, offset by mix and lower fuel surcharges.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major US incumbents, while DHL Express leads in Europe. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

FedEx announced that after a period of "extensive discussions," it will not renew its contract with the United States Postal Service, or USPS, which will expire on Sept. 29. Recall that for roughly the past 20 years, FedEx express has provided airlift transportation for several USPS products within the US, including first class mail and priority mail express. Overall, this does not come as a surprise given management's commentary in recent quarters, which (as we heard it) seemed to hint that material service and pricing changes were necessary in order for a deal to be mutually beneficial and work effectively.

UPS held an investor day in which management highlighted its key strategic growth and efficiency efforts while establishing 2026 financial targets. Overall, we didn't note any major surprises during the presentation.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major US incumbents, while DHL Express leads in Europe. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS' fourth-quarter top line fell 8% year over year; slightly below our forecast because of a weaker-than-expected showing for international package volumes. Domestic volumes were mostly in line, as were overall segment yields (revenue per package). Relative to fourth-quarter 2022, lower revenue stems from continued package volume declines, the soft demand and pricing backdrop for truck brokerage (Coyote) and global forwarding, and lower fuel surcharges. That said, we believe core pricing remains positive.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS third-quarter top line fell 13% year over year (removing foreign exchange); this was below our forecast because of greater than expected domestic package volume diversions resulting from the potential Teamster's strike. Relative to third-quarter 2022, the revenue decline stems from lower overall package activity, rate and demand normalization for the truck brokerage and global forwarding operations, and lower fuel surcharges. That said, core pricing remains positive.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of CEO Carol Tomé's "better, not bigger" framework.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of new CEO Carol Tomé's "better, not bigger" framework.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The company divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of new CEO Carol Tomé's "better, not bigger" framework.

UPS' second-quarter top line fell 11% year over year (removing foreign exchange); below our forecast, largely from lost U.S. domestic package volumes as shippers diverted freight ahead of a threatened Teamsters strike. Relative to second-quarter 2022, the revenue decline stems from lower overall package volumes, rate and demand normalization for the truck brokerage and global forwarding operations, and now-falling fuel surcharges. That said, core pricing remains positive, which we expect to persist.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The firm divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of new CEO Carol Tomé's "better, not bigger" framework.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. The firm divested its less-than-truckload division, UPS Freight, in the second quarter of 2021 as part of new CEO Carol Tomé's "better, not bigger" framework.

UPS' first-quarter top line fell 5% year over year (removing foreign exchange), below our forecast on lower-than-anticipated U.S. domestic package activity. Relative to first-quarter 2022, the revenue decline stems from falling package volumes along with rate and demand normalization for the truck brokerage and global forwarding operations, partly offset by higher fuel surcharges and core pricing gains in the package segments (adjusted package yield was up about 4.5%).

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the landscape; FedEx and UPS are the major U.S. incumbents, while DHL Express leads in Europe. UPS has also raised its exposure to the asset-light third-party freight brokerage market, especially with its 2016 acquisition of truckload broker Coyote Logistics. Note the firm divested its LTL trucking division, UPS Freight, in second-quarter 2021 as part of new CEO Carol Tomé's "better, not bigger" framework.