UPS was challenged by tariffs and changing consumer habits in the second quarter, but air cargo business helped improve its results.
The US express company announced second-quarter 2025 revenues of $21.1bn, down 2.7%, and operating profit of $1.7bn, down 6.3%.
US Domestic division revenue declined 0.8% to $14.1bn. UPS said this was "primarily driven by the expected decline in volume, partially offset by increases in air cargo and revenue per piece". Operating profit for the Domestic Segment was down 7.3% to $916m.
In its second quarter earnings call document, the company said the average daily volume for the US Domestic division in the second quarter declined 7.3% year on year.
International division revenue was $4.5bn, up 2.6%. This was "driven by a 3.9% increase in average daily volume", said the company. However, operating profit was down 6.4% to $672m.
Supply Chain Solutions division revenue was $2.7bn, down 18.3%. This was "primarily due to the impact from the third quarter 2024 divestiture of Coyote". Operating profit for the division dropped 1.7% to $234m.
UPS said that it had not provided any revenue or operating profit guidance "due to the current macro-economic uncertainty".
In its second quarter earnings call document, the company highlighted a challenging operating environment and said consumers had scaled back on consumption, which affected the US small package market. Additonally, manufacturing activity remained soft.
Outside of the US, UPS stated changes in policies and increases in tariffs impacted trade flows.
In its first quarter results announcement, UPS said it would cut around 20,000 jobs as a result of its decision to reduce its business with Amazon.
In its second quarter earnings call document, UPS said it would focus on accelerating the reduction of Amazon volume and reconfiguring its US network.
The company said it had closed 74 buildings in the year to date and expected to close additional sorts and buildings this year. It added a voluntary separation programme for all full-time US drivers had been announced.
"I want to thank all UPSers for their dedication and hard work in what continues to be a dynamic and evolving trade environment,” said Carol Tomé, UPS chief executive officer.
“Our second quarter results reflect both the complexity of the landscape and the strength of our execution. We are making meaningful progress on our strategic initiatives, and we’re confident these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage.
Source: https://www.aircargonews.net/finance/air-cargo-helps-ups-through-q2-challenges/1080456.article
Global trade dynamics are undergoing a fundamental transformation, driven in part by tariff policies introduced by former U.S. President Donald Trump. According to Peter Sand,...
Dimerco’s Asia Pacific Freight Report for August has stated shippers are uncertain about planning air cargo schedules as the US tariff deadline of 1 August approaches, but...
International air cargo volumes across Asia Pacific continued to rise in June, as regional airlines reported a 5.6% year-on-year increase in freight tonne kilometres (FTKs),...
Air cargo tonnages from southeast Asia to the US have rebounded, but this is reportedly due to a previous drop in volumes rather than a surge ahead of the 1 August US tariffs...
Air cargo tonnages from China and Hong Kong to the US bounced back in the last full week of July as capacity returned following flight cancellations the previous week linked...
Air cargo tonnages softened in the third week of July from most of the world’s main regions, with few signs of any last-minute surge in tonnages ahead of the latest US tariff...
Global airfreight rates held firm during the second full week of July, despite a second consecutive week of declining worldwide flown tonnages—driven largely by weakening...
Global airfreight rates experienced a modest decline last week, consistent with the sector’s typical mid-summer lull. According to the latest market intelligence from the...
At first glance, the transatlantic air cargo market appears calm—characterized by relatively stable capacity and freight rates. However, beneath this surface-level stability,...
ALS