B2B Payments

B2B Surpasses B2C For UPS

United Parcel Service held its quarterly earnings call this week, and the logistics and delivery conglomerate’s B2B operations took center stage as one of its strongest aspects for growth. According to reports from The Motley Fool, UPS CFO Richard Peretz highlighted B2B services as outpacing B2C.

“The pace of B2C expansion continued slowing, while B2B gains were due to omnichannel and return services in the retail sector,” he said. Reports said UPS CCO Alan Gershenhorn later revealed that, currently, the divide means 45 percent of its operations are B2C, and 55 percent are B2B.

These figures, reports added, suggest strengthening B2B services despite what CEO David Abney described as a “slight decrease” in business from the manufacturing sector. Omnichannel and online commerce, the company said, are contributing to the expansion of B2B operations.

Such figures are in line with UPS’ earlier update on 2015 performance levels. Earlier this summer the corporation took steps to broaden its B2B reach, in part by linking up with alternative lending platform Kabbage to help UPS’ financing unit, UPS Capital, reach more deals with small businesses.

But the results differed from previous data, which saw UPS’ B2B operations growing at a slower rate than B2C. At the time, the company said B2B volume increased by just 3 percent last year, compared to a 12 percent increase for B2C shipment volume.

UPS also noted a new focus on bolstering its logistics services to ensure that it is adequately servicing online merchants during the holiday season in an effort to avoid blunders seen from past high-peak seasons. Reports said UPS President of U.S. Operations Myron Gray has pinpointed 10 projects that are aimed at helping UPS avoid a repeat of past disasters; those projects include “hub modernization, automation or expanded capacity.”

The efforts echo analysts’ earlier suggestions that UPS would be investing in its logistics operations to ready itself for the 2015 gift-giving months. Last June the conglomerate reached a deal to acquire Parcel Pro, a shipping logistics firm, and just weeks later struck another merger agreement to take on Coyote Logistics for $1.8 billion. The investments, experts said, were likely part of an overall strategy to beef up its strength for the holiday season.

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