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Shareholders of United Parcel Service Co. rejected proposals at the annual meeting for increased disclosure of lobbying activities and a change in the voting power of preferred stock.
The voting proposal would have reduced the power of Class A stock to one vote per share from the current 10 votes. About 75 percent of voting power is held by Class A owners, including officers and former employees.
Amazon.com is testing its own in-house delivery service in a few key cities like San Francisco, Los Angeles, and New York. According to The Wall Street Journal, the company hopes to save money and reduce delivery times by cutting out package delivery companies like United Parcel Service and FedEx.
At first glance, the prospect of having Amazon.com go its own way might seem like a big problem for UPS and FedEx. In reality, while Amazon may “insource” some deliveries, most of its packages will continue to be delivered by other companies for the foreseeable future. Moreover, other retailers will become ever more reliant on UPS and FedEx to compete with Amazon.
The market generally reacts to negative news too drastically and in many cases value can be found before the dust settles. UPS has been dinged up in the past few months by a combination of mis-estimating holiday traffic and increased costs due to the harsh weather over the first quarter. These events led to United Parcel Service (UPS) missing analysts’ estimates which has resulted in a buying opportunity.
The Teamsters’ Local 89 Union at United Parcel Services’ famed Worldport Hub has once again voted down the proposed Louisville air supplement in a vote of 2804 against and 185 for the proposal. This marks the second time that the contract has been voted down, and it highlights the ongoing strain between UPS and one of the company’s most important local unions.
Lately there has been a shift in customer preference towards economical means of shipping packages, even if it means waiting a few extra days for their shipments to get delivered. For UPS, this leads to a cannibalization effect wherein package volumes of time-efficient-yet-pricy services decline and volumes for economical services increase. Volume for UPS SurePost, a low cost service which leverages the resources of the U.S. Postal service, increased more than 30% in the fourth quarter 2013 as shippers continued to choose lower costs over faster deliveries. From an overall volume perspective, there is no impact for UPS. However, the trend has been putting pressure on UPS’s revenue per package.