Consultant’s Insight: UPS peak volumes not so ‘peaky’

Peak holiday season volume for UPS looks like a mixed bag despite the company’s expectations for “healthy peak volume in the fourth quarter,” as UPS Chief Executive Carol Tome told analysts in October. [caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] Tome said at the time that volumes were at pre-pandemic levels. “What we’re seeing is basically a reversion to the main,” Tome said. “If you look at the growth rates projected for the small-package market in the United States, it’s low single digits for the next couple of years.” Indeed, according to estimates from parcel management firm ShipMatrix , carriers will deliver 82 million parcels per day during the peak holiday season that starts around Thanksgiving and ends in mid-January. Last year, the industry delivered an average of 90 million parcels per day during that period. Low UPS peak airfreight UPS airfreight volumes also appear low. UPS’ volumes January through September in pounds are down 11.7% for enplaned and down 10% for deplaned compared to the same period in 2022, according to the latest statistics from the Louisville Regional Airport Authority . UPS’ main air hub, Worldport, is located at the Louisville Muhammad Ali International Airport (SDF) in Kentucky. Anecdotally, comments on UPS discussion boards suggest volume growth is slow in some parts of the U.S., such as Chicago and the Northeast, and in parts of Texas, California, Florida and Georgia. “No noticeable uptick at Worldport,” read a post on Reddit this week. “The ramp still has 5-6 working planes sitting on it every morning, some of which are the big 747s. During peak season , the only planes that don’t fly are the broken ones.” Others commented that UPS airfreight volumes are also slow in Seattle and Denver. Regarding Denver, one commenter noted, “Slow airfreight. So many laid off feeders hoping for work at peak then laid off again.” Q4 outlook The U.S. domestic airfreight demand market has flattened, according to UPS Supply Chain’s fourth-quarter outlook, and the second half of 2023 resembles first-half performance with a slight peak surge in Q4. Meanwhile, capacity continues its upward trend while consumer demand remains relatively soft. As a result, there is a downward trend in rates. The international air cargo demand market has also flattened and grown recently. However, capacity growth continues to outpace demand, with international belly capacity recovering close to 2019 levels. As a result, market rates continue to decline, but the decline has slowed. Market rates have been mostly flat from May but are still elevated from pre-pandemic levels. In addition, low-value e-commerce air export growth from Asia-Pacific continues to boost overall demand in the air cargo market. High volumes from large exporters, in addition to high-tech product launches, will create a spike in export demand from China, Vietnam and other Asia-Pacific countries, resulting in an anticipated positive year-over-year demand growth by the end of Q4. Join Air Cargo Next for the upcoming webinar, “The future of AI in air cargo,” on Tuesday, Dec. 5, at 11 a.m. ET. More information about the webinar and registration is available here .

Consultant’s Insight: UPS peak volumes not so ‘peaky’

EgyptAir to grow widebody freighter fleet

LogiPharma study shows sustainability challenges

Related Posts

From the Cockpit with K2 Aviation’s Karl Ryan

Production freighter activity highlights May FATs

Widebodies account for more than half of April’s transactions

LogiPharma study shows sustainability challenges

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password