UPS Sees Shoppers Waiting Until December Despite Early Sales Events

Despite an unprecedented early start to the holiday shopping season, the world’s largest delivery service says consumers are unmoved and are holding off until December.

“This year we anticipate our volumes will peak later in December compared to last year as we expect consumers will return to more pre-pandemic shopping behaviors,” UPS CEO Carol Tomé said Tuesday (Oct. 25) during the company’s quarterly earnings call.

This forecast follows a quarter in which UPS saw its average daily volume dip 1.5% in the United States and 5.2% internationally as it was impacted by the uncertain economy.

“In the third quarter, the global economy softened, especially outside the United States,” Tomé said during the call.

At the same time, its revenue grew in both segments as higher prices drove a higher revenue per piece. Overall, its revenues rose 4.2% year over year, the company said in its earnings release issued Tuesday (Oct. 25).

“The macro environment is very dynamic, but we are on track to achieving our 2022 financial targets by executing our strategy and controlling what we can control,” Tomé said in the company’s earnings release issued Tuesday (Oct. 25).

In the company’s third segment—supply chain solutions—revenue decreased 6.3% due to “declines in air and ocean freight forwarding, partially offset by growth in our logistics and healthcare businesses,” the release stated.

Supply chain solutions is the segment of UPS that manages global supply chains, including logistics, distribution, transportation, freight and customs brokerage.

The earnings report comes a month after competitor FedEx announced that it was not providing guidance for the rest of the year after a quarter in which its global package and freight volume dropped 11% year over year.

Read more: FedEx: Deteriorating Economy Drove 11% Drop in Package, Freight Volume

“For the remainder of the year, while we are not providing guidance, given current uncertainties, our plan is based on an expectation that the weak trends we saw in late Q1 will persist across our major geographies,” FedEx Executive Vice President and Chief Financial Officer Mike Lenz said Sept. 22 during the company’s quarterly earnings call.

Looking ahead, UPS has reaffirmed its guidance for full year 2022. It is also gearing up for the holiday rush, having announced in September that it aimed to hire 100,000 seasonal employees.

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