Driven by sustained eCommerce tailwinds, global logistics giant UPS is focused on expanding its small and medium-sized businesses (SMB) eCommerce package volume in response to changing consumer demand and commercial realities, CEO Carol Tomé said Tuesday (Oct. 26).
Noting a decline in its last-mile UPS SurePost business of 2.7% in the quarter, CFO Brian Newman said “higher yielding SMB average daily volume, including platforms, was up 10.9% and third quarter SMBs made up 27.4% of US domestic volume compared to 23.6% last year.”
An emphasis on expanding services for SMBs, which was announced in 2019 and really took off in Q4 2020, is paying off. Tomé told analysts that “SMBs value the new capabilities we are providing” with international SMB average daily volume up nearly 4% as well.
In spite of well-known supply chain challenges, the largest parcel delivery company is having a solid year thanks to consumers’ undiminished desire to have goods arrive at their doors.
PYMNTS found in The Bring-It-To-Me Economy, a Carat from Fiserv collaboration, that the ubiquity of order-online and at-home delivery experiences has done more than raise the bar on ease and convenience. It has fundamentally changed consumers’ mindsets about what shopping truly is, often removing the physical store from the equation.
See also: The Bring-It-To-Me Economy
Closing in on Last Mile
Pursuit of higher SMB package volumes generated by eCommerce platform sales in the U.S. and internationally was a main theme of UPS’s Q3 recap, and related activities in the quarter.
In October, UPS completed its acquisition of local same-day delivery tech platform Roadie. In a statement, UPS said, “Roadie’s leading technology, combined with UPS’s portfolio, will open doors for new growth opportunities. Roadie’s technology platform also will provide opportunities to improve existing, and potentially add additional, UPS small package capabilities.”
Tomé added, “We see many opportunities to grow our international SMB volume as we continue to improve our digital experiences. And roll out DAP, our Digital Access Program to customers outside of the U.S.” The DAP gives small shippers access to discounts and more.
On the healthcare logistics front, Tomé said, “When COVID-19 vaccines were rolled out late last year, the world turned to UPS and we were ready with connected capabilities, technology and expertise. Our brand relevance here is attracting new SMB healthcare customers,” she said, adding that “we are on track to deliver more than 1 billion vaccine doses by the end of this year with 99.9% on time delivery.”
Read: UPS Moves Into Same-Day Gig Delivery With Roadie Acquisition
Peak Season 2021, and Price Hikes
With the holiday shopping and shipping season kicking in early this year due to supply chain disruption concerns, Tomé said, “We believe we are well on our way to deliver a peak that will be a win for UPS, shippers, recipients,” having expanded weekend delivery, added sorting bandwidth.
“We began collaborating with our largest customers several months ago and will stay in close contact with them during the holiday shipping season,” she said. “Our technology allows us to match daily capacity with customer demand and where we need to we will again control the amount of volume that enters our network.” She said, “We are laser-focused on peak.”
For the record, UPS reported that revenue rose 9.2% to $23.2 billion. Consolidated operating profit was up 23.4% to $3 billion, with Tomé noting that “in the first nine months of 2021 UPS has generated more operating profits than any full year in our history.”
She added that this week UPS will announce a U.S. general rate increase for 2022 of 5.9% “Reflecting the value of the services we offer and cost inflation pressures.”
Read also: UPS Dips A Toe Into Same-Day Delivery
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