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Home E-commerce

UPS leads carriers in Q4 on-time deliveries while growing revenue

Solega Team by Solega Team
January 31, 2025
in E-commerce
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UPS leads carriers in Q4 on-time deliveries while growing revenue
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The United Parcel Service Inc. (UPS) reported a 1.5% year-over-year increase in consolidated revenue for its fiscal Q4 and full year, which ended Dec. 31 and included the busiest sales period of the year.

CEO Carol Tome told investors on the carrier’s Q4 earnings call that it grew its U.S. small and medium-size business (SMB) penetration in 2024. UPS finished the year with SMBs comprising 28.9% of its total U.S. volume, a 0.3% year-over-year increase.

UPS fulfills deliveries for online orders from more than 1,000 retailers in the Top 2000 Database. The database is Digital Commerce 360’s rankings and more of the large online retailers in North America based on their annual ecommerce sales.

Tome also credited UPS’ digital access program (DAP), as it generated $3.3 billion in global revenue. That’s a 17% year-over-year increase.

UPS is also moving from a scanning network to a sensing network through its “smart package, smart facility, RFID initiative.” RFID refers to radio frequency identification, a wireless tracking system. UPS equipped nearly 60,000 package cars with RFID sensors in 2024, which represent 66% of its fleet, she said. That eliminates 12 million manual scans per day, “enhancing package visibility for our customers,” Tome said.

UPS holiday-season performance in 2024

During the Cyber 5 — the five-day period from Thanksgiving through Cyber Monday — UPS’ on-time performance for all domestic parcel services was 98.9%, according to ShipMatrix. That put it ahead of top competitors FedEx Corp. (98.7%) and the U.S. Postal Service (97.4%), ShipMatrix data shows.

ShipMatrix tracks shipping volume and on-time performance among parcel-delivery companies.

Then, for December as a whole, its on-time delivery performance remained the best among the three carriers at 96.5%, according to ShipMatrix data.

That marked the seventh straight year in which UPS led in on-time delivery during the holiday season, CEO Carol Tome told investors on the carrier’s Q4 earnings call. UPS cited ShipMatrix data on its website for its holiday-season delivery performance.

“By leveraging our technology and increasing automation, we’ve processed and delivered the same amount of volume in the fourth quarter as last year, but we did it with 3 million fewer hours while delivering excellent service,” said Brian Dykes, chief financial officer, on the earnings call with investors.

He attributed the increased efficiency to lowering small-package block hours in its air network, which was a response to changing volume levels. Block hours refers to the time from when an aircraft departs until it arrives at its destination gate.

Dykes also attributed the UPS Q4 efficiency to insourcing 50% of SurePost volume, and to tightly managing rental equipment through peak. SurePost is a ground service that delivers small, lightweight packages to residential consumers. UPS calls it “an economy service for your less urgent, lower value shipments.”

UPS Q4 revenue

In its fiscal Q4, UPS revenue grew to $25.3 billion.

The majority of that revenue ($17.31 million) came from UPS’ domestic segment. UPS domestic revenue grew 2.2% year over year, which the carrier attributed to a 2.4% increase in revenue per piece as well as increases in air cargo.

Prior to peak season, the U.S. Postal Service’s contract with FedEx for air cargo, which it held for more than 20 years, expired Sept. 29, 2024. As of Sept. 30, USPS and UPS have worked together on a new air cargo contract. The new contract will last for at least five and a half years, USPS said in a written statement on April 1, 2024, announcing the news.

Internationally, UPS revenue grew 6.9% year over year to reach $4.92 million. It attributed the growth to an 8.8% increase in average daily volume.

Meanwhile, the UPS Supply Chains Solutions division’s revenue declined 9.1% year over year to about $3.07 million. It attributed the reduction to its selling of Coyote, a truckload brokerage business.

How much did UPS make in 2024 revenue?

For the full year, UPS revenue was $91.1 billion. That’s a slight increase from $91.0 billion in 2023 revenue. However, UPS 2023 revenue had decreased 9.3% from the prior year.

About 62% of UPS’ U.S. volume flows through automated facilities, Tome told investors. That compares with 60% in 2023.

In December, it opened two health care cross-dock facilities in Italy and Germany, she said. Then, in January 2025, UPS completed its acquisition of Frigo-Trans, a European health care logistics company specializing in cold chain. Cross-dock facilities are warehouses that sort and transfer incoming goods to outgoing trucks for delivery to customers. Cold chain refers to a temperature-controlled delivery process for sensitive products such as vaccines, foods and certain chemicals that prevents spoilage or degradation.

UPS plans for 2025 and beyond

Tome said UPS closed out 2024 realizing it had three specific challenges in the U.S. to address in 2025:

  1. Small-package market.
    “Today, it’s a slow growth market with changing package characteristics,” Tome said.
  2. Concentration of volume and revenue with its largest customer.
    “Looking ahead, we project this business if we take no action we’ll drive diminishing returns,” she said.
  3. Reliance on USPS for UPS’ SurePost product.
    “USPS is changing its operating model, which we believe puts service at risk,” she added.

“We’ve reached an agreement in principle with our largest customer for a significant reduction in volume, lowering their volume with us by more than 50% by the second half of 2026,” Tome told investors. “With this, we will right-size our network and retain the volume that is nutritive for us and for our customer.”

Additionally, effective Jan. 1, UPS no longer uses USPS for the SurePost product.

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