UPS revenue falls 2.7% amid ‘ever-evolving trade policies’

UPS reported $21.2 billion in second-quarter revenue, down 2.7% from the corresponding period last year. “Our second-quarter financial results reflect the impact of a complex macro environment driven by ever-evolving trade policies,” Chief Executive Carol Tome said on today’s earnings call. [caption id="attachment_56867347" align="aligncenter" width="2560"] UPS has twenty-two outstanding orders for new 767-300Fs. (Photo/Cargo Facts)[/caption] UPS is looking into additional opportunities for nearshoring in response to tariff uncertainties, Tome said. But it has been slow-going, especially regarding the planned acquisition of Mexican delivery company Estafeta Carga Aerea. The integrator announced plans to acquire Estafeta in July 2024, but “clearing regulatory and pre-closing conditions is turning out to be a slow process,” Tome said. Estafeta provides narrowbody freighter services in Mexico and elsewhere in Latin America with four 737-400SFs and two -400BDSFs . UPS fleet UPS has orders for twenty-two 767-300Fs, having signed up for eight more in December 2024. The integrator intends to retire one MD-11 in the second half of 2025, reducing its MD-11 fleet to twenty-six, according to its latest fleet table released today. The company aims to replace its MD-11Fs with 767s. Q2 results The integrator reported adjusted net income of $1.3 billion, down 14.2% year over year. It also reported in Q2: Adjusted operating profit of $1.9 billion, down 9.1% YoY; Adjusted income before taxes of $1.7 billion, down 14% YoY; and Adjusted diluted earnings per share of $1.55, down 13.4% YoY. Among its segments, UPS’ Q2 revenue was: $14.1 billion for U.S. Domestic Package, down 0.8% YoY; $4.5 billion for International Package, up 2.6% YoY; and $2.7 billion for Supply Chain Solutions, down 18.3% YoY. UPS attributed the decline in U.S. Domestic Package revenue to an expected decline in volume, which was partially offset by increases in air cargo and revenue per piece, today’s earnings report said. Trade policies’ effects on UPS U.S. domestic daily package volume decreased 7.3% YoY to 16.6 million and average revenue per U.S. domestic package was $13.03, up 5.5% YoY. “The U.S. small package market was unfavorably impacted by U.S. consumer sentiment that was near historic lows,” Tome said. “For the first time in three years, consumer spending on discretionary categories like restaurants and automobiles outpaced growth in essential items. “On the commercial side of the economy, manufacturing activity in the U.S. remained soft,” she said. “These macroeconomic dynamics impacted overall market demand as well as demand by customer segment and product.” International daily package volume increased 3.9% YoY to 3.2 million and average revenue per international package was $21.14, down 1.3% YoY, according to today’s report. Average daily volume on UPS’ China-to-U.S. trade lane fell 34.8% YoY in May and June combined, following U.S. implementation of heightened tariffs against China and elimination of de minimis exceptions , according to Tome. “Our China-to-U.S. trade lane is our most profitable trade lane and the volume decline here pressured our international operating margin,” Tome said. “Trade follows policy and generally tariffs are not good for trade ,” she said. “But it’s important to remember that, with policy changes, trade doesn’t stop, it moves.” UPS saw its Q2 volume on trade lanes from China to the rest of the world increase 22.4% YoY and the integrator nearly doubled its capacity between India and Europe, Tome said. ‘Glide down’ efforts UPS has closed seventy-four buildings so far this year but the staffing decrease was lower than anticipated, Tome said. The company did not disclose employee headcount. UPS intends to close more buildings by yearend and continue to reduce staff, the company said. The integrator announced in April that it planned to cut 20,000 jobs this year. Also part of its strategic reorganization, UPS last year agreed with Amazon to reduce Amazon’s volume with UPS by more than 50% by the second half of 2026. Shares of UPS ( NYSE: UPS ) were down 9.57 % from market open to $90.84 as of market close today. UPS has a market capitalization of $77.9 billion. Cargo Facts Symposium, the quintessential event for stakeholders and key leaders in the global freighter and air cargo industries, will take place Oct. 22-24 at the Grand Hyatt in Nashville . Learn more and register today to take advantage of the early-bird rate.

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