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UPS enters flat-rate pricing battle with FedEx, USPS – Atlanta Business Chronicle

UPS has entered the flat-rate pricing battle with the United States Postal Service and FedEx.

United Parcel Service Inc. (NYSE: UPS) debuted a new “predictable flat rate shipping option” dubbed UPS Simple Rate, that gives small- and medium-sized business customers a national flat rate that cuts the limitations of its rivals.

The new service lets small businesses ship by second- or third-day air or ground services to anywhere in the U.S. for a flat rate — split into five tiered sizes. Customers don’t need to enter package weight and, unlike rival FedEx Corp. (NYSE: FDX), doesn’t involve shipping zones and allows customers to use their own boxes.

FedEx, UPS begin the great last-mile delivery divergence – Freightwaves

Anyone who works in the parcel delivery business knows that life holds three certainties – death, taxes, and UPS Inc. (NYSE: UPS) and FedEx Corp. (NYSE:FDX) moving in lockstep on almost everything. The first two are immutable. The third one, though, perhaps not so much.

To be sure, the tag team still exists. Both launched seven-day-a-week deliveries within a few months of each other. UPS followed FedEx’s lead earlier this year and dropped holiday peak season residential delivery surcharges, though it took UPS about two years longer to act. Yet 2020 will likely see increasing divergences between the two, though the smoke will not clear until UPS announces its rate schedule (FedEx already has).

Nowhere will the separation be more profound than in the hot-button segment of last-mile residential delivery. For years, FedEx and UPS have relied on the U.S. Postal Service (USPS) for final-mile delivery of parcels that the two companies have inserted deep into the postal infrastructure. Deliveries are typically made in one to five days, depending on various factors.

FedEx and UPS Could Benefit From Higher Postal Prices. Trade Might Get in the Way. – Barron’s

The U.S. Postal Service is asking for an average 5.4% increase for its express-shipping products in its proposed 2020 price increases submitted Wednesday. That is a bit of good news for parcel shippers such as United Parcel Service and FedEx, which might cheer the tailwind to industry pricing.

J.P. Morgan, however, thinks investors should keep higher pricing in perspective. “We expect a muted reaction from [the parcel shippers],” analyst Brian Ossenbeck wrote in a Thursday research report, saying that price increases “weren’t another step-change like 2019.”

The increase is healthy, but lags behind last year’s request of about 7.3%, according to data from Stamps.com (ticker: STMP).

 

International Mail Rates Are Going Higher. It’s a Win for FedEx, UPS, and the U.S. Postal Service. – Barron’s

International postal rates are going higher, potentially shifting the balance of power between companies such as United Parcel Service and FedEx and the U.S. Postal Service.

The Universal Postal Union, a conglomeration of 192 countries that ensures mail is picked up, sorted, and carried across borders, voted Wednesday to let governments set their own fees for handling mail delivered internationally. The changes, agreed to following a threat by President Donald Trump to leave the union, will take place over five years.

A congress of UPU members initially voted to reject a U.S. proposal that would have allowed for a quicker increase in the fees, known as terminal dues, that countries charge one another to handle deliveries. The U.S. voted in favor of the successful, revised plan, a result that takes the worst potential outcome—the U.S. leaving the union—off the table.