UPS has reported that in the second quarter net income and revenue both rose strongly compared to the same quarter last year.
Net income came in at $1.68 billion, up 13.5 per cent year-on-year (YOY) on the $1.48 billion in 2018, while revenue reached $18.04 billion, up 3.4 per cent YOY on the $17.45 billion in the same quarter last year.
UPS said it turned the rising demand for next-day service into strong financial results in the US and leveraged asset-light and proven cost management strategies in the international and supply chain and freight segments.
US daily volume grew by more than seven per cent in the quarter while next-day air volume was up over 30 per cent.
Supply chain and freight operating profit increased nearly 26 per cent to more than $270 million (2018: $216 million).
International air freight achieved robust profit growth on a decline in tonnage, driven by expanded buy/sell spreads. UPS Freight achieved a 3.9 per cent increase in revenue per LTL (less-than-truckload) hundredweight as the unit focused on revenue quality.
“Our Transformation initiatives are generating greater efficiencies across the network and, when combined with our growth strategies, UPS achieved profit growth in all segments,” said David Abney, UPS chairman and chief executive officer.
Abney also said that demand for faster delivery is a structural change in the industry. “Anticipating this change, our additional air capacity and modernised network enabled this growth to have a positive impact on profitability and positions UPS well to serve the growing needs of the market,” he added.