Tom also pointed out that along with a shift toward more economical products, certain new e-commerce customers surged into UPS’s network, leading to notable growth in the SurePost product line. UPS is anticipating ongoing shifts in consumer behavior as customers pivot from higher-cost shipping methods to more budget-friendly options. Despite these changes, the company emphasized its strategy of focusing on high-value segments, with an ambitious target of increasing the U.S. operating margin to 12% in the longer term.
On the international front, while some regions reported declines, notable pockets of demand improvement were identified. Through its strategic initiatives, UPS plans to enhance its market position, including the pending acquisition of Estafeta, a leading small package provider in Mexico. This move is viewed as essential for establishing a strong foothold in North America and driving growth in cross-border logistics, as well as augmenting UPS’s service capabilities. Overall, while UPS navigates through transitions resulting in volume and product mix changes, the management expressed confidence in their long-term operational strategies and the potential for renewed profitability.
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