UPS gained significant new business at the end of last year from competitor DHL’s announced withdrawal from the U.S. domestic shipping market, but that wasn’t enough to offset a drop in package volume caused by the sagging economy.
The company is going on a money saving campaign. The steps to reduce expenses were apparently well-received on Wall Street, where UPS shares rallied 6 percent.
The world’s largest shipping carrier said yesterday that its total U.S. volume decreased 4.4% in the fourth quarter of 2008, including a 3.7% percent drop in ground volume and a 10.1% decline in next-day air.
UPS’s main air hub is in Louisville as is the headquarters for its airline.
Scott Davis, chairman and CEO, said in a statement.’The severe decline in economic activity around the world resulted in sharply lower package and freight volumes for UPS’ and has prompted broad cost-cutting measures,
He said UPS will continue to build for the future. It recently opened a new hub in Shanghai and is building another hub in southern China.
He told the Courier Journal that UPS fell short of Wall Street expectations by earning 83 cents per share in the most recent quarter, down from $1.07 per share in the fourth quarter of 2007.
Despite the economy, UPS moved about the same volume of packages during December’s holiday season as it did the year before.
German-owned DHL, the fourth-largest shipper of packages in the U.S., announced in November that it planned to eliminate the bulk of its U.S. operations and focus on international shipments as of January 30.
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