UPS becomes primary air cargo carrier for USPS

Apr 1, 2024 8:15 pm | News

ATLANTA – UPS (NYSE: UPS) has been designated as the primary air cargo provider for the United States Postal Service (USPS), expanding the existing partnership between the two entities. The contract, effective immediately, will see UPS handling the majority of USPS air cargo operations within the United States after a brief transition period.

Carol B. Tome, CEO of UPS, stated that the collaboration with USPS has resulted in an innovative solution that leverages UPS’s extensive, integrated network to the benefit of both organizations.

UPS, a global leader in logistics with a presence in over 200 countries, reported revenues of $91.0 billion in 2023. The company employs around 500,000 people worldwide and focuses on a customer-centric, innovation-driven approach. Committed to environmental sustainability and social responsibility, UPS also promotes diversity, equity, and inclusion within its corporate framework.

This strategic move is expected to enhance the efficiency of USPS’s air cargo delivery services by utilizing UPS’s established logistics and transportation network.

The information for this article is based on a press release statement from UPS.

InvestingPro Insights

United Parcel Service (NYSE:), recently securing a pivotal role as the primary air cargo provider for the USPS, continues to solidify its position in the logistics sector. With a robust market capitalization of $126.8 billion, UPS showcases its financial strength and industry relevance. Reflecting on its performance, the company has a Price to Earnings (P/E) ratio of 19.05, a moderate figure that suggests a balance between its share price and earnings power. The adjusted P/E ratio for the last twelve months, as of Q4 2023, stands slightly lower at 16.76.

Investors seeking stability in their portfolio may find UPS’s track record of dividend reliability attractive. An InvestingPro Tip highlights that UPS has not only raised its dividend for 14 consecutive years but has also maintained dividend payments for an impressive 26 consecutive years. This consistent return to shareholders is complemented by a dividend yield of 4.39% as of the latest data, which is competitive in the current market environment.

Despite recent challenges reflected in a revenue decline of -9.35% over the last twelve months as of Q4 2023, UPS’s gross profit margin remains healthy at 22.96%. This indicates the company’s ability to retain a significant portion of sales as gross profit. Moreover, as a prominent player in the Air Freight & Logistics industry, UPS is expected to remain profitable this year, according to analyst forecasts, which is an InvestingPro Tip that underscores the company’s resilience amidst industry fluctuations.

For those interested in further insights, there are additional InvestingPro Tips available, which provide deeper analysis into UPS’s financial health, industry standing, and future prospects. To explore these valuable insights, visit InvestingPro. And don’t forget, you can use the promo code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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