Category: Industry News

Booming online retail sales are good news for the U.S. Postal Service, but its carriers are incurring a cost: more dog bites.

United Parcel Service said its 66,000 deliverers suffered about 900 dog bites last year, a percentage that has remained fairly stable. Spokesman Dan McMackin, a former UPS driver who used to carry dog biscuits to woo surly pets, said he found pit bulls and smaller dog breeds to be more nettlesome than “hunting dogs” — such as Labrador retrievers and beagles — who “don’t have much to prove.”

Amazon and UPS are behemoths. Socialists can shake the foundations of the US economy by agitating and organizing at both.

The modern economy revolves around the sprawling logistics industry. Nothing demonstrates this more clearly than the current situation at Amazon and UPS. If Amazon makes good on its recent pledge, it will add another 100,000 workers to its US workforce by 2018, making it one of the country’s largest — and one of the largest nonunion — employers.

The US labor movement faces several existential threats right now, but Amazon’s is a special kind. The company’s breakneck expansion has revolutionized the logistics industry. Its impact is most deeply felt at United Parcel Service (UPS), the country’s largest private-sector, unionized employer, with nearly 250,000 of its workers represented by the Teamsters.

An EU court agreed with United Parcel Service on Tuesday that the EU had wrongly blocked its takeover of Dutch peer TNT four years ago, potentially allowing the world’s largest package delivery company to sue regulators for damages.

The European Commission rejected the 5.2 billion euro ($5.5 billion) deal in 2013, saying UPS had not offered sufficient concessions to allay concerns that the deal would hurt consumers. The deal would have expanded its presence in Asia and Latin America.

While TNT has since been bought by FedEx in a 4.4 billion euro deal approved by the Commission last year, the ruling by Europe’s second-highest court could affect other contentious deals.

Highlighting the importance of trade across the southern border of the U.S. Abney pointed out that every 22 packages that cross in and out of U.S. borders creates a job at UPS. He added that while UPS supports free trade and open borders in general, the company also believes in fair trade.

Abney’s views on NAFTA are at odds with those of Fred Smith, CEO of FedEx, who has been highly critical of Trump’s trade policies, saying that getting rid of NAFTA was “the single worst trade deal ever approved in this country,” which would be “catastrophic for the U.S. economy.”

Has the investment thesis changed?

FedEx and UPS are proactively taking measures to improve profitability Opens a New Window. (dimensional-weight pricing, adjusted oversize package surcharges, and so on), but it’s proving harder than anticipated to grow margin with e-commerce deliveries. In a nutshell, we know capital expenditures are likely to go up, but we can’t be clear on whether FedEx and UPS have a handle on increasing profitability with e-commerce deliveries.

All told, investors should feel a little less comfortable holding UPS and FedEx, particularly at these valuation levels. E-commerce growth is creating challenges, and it’s not clear yet that both companies are overcoming them in terms of margin and cash flow generation.