The American courier giant UPS reported first-quarter sales revenues of $21.7 billion in 2024, a decrease of 5.3% compared to the $22.9 billion earned in the same period in 2023. The group’s operating profit for the quarter was $1.6 billion, which is 36.5% lower than Q1 2023.
“In the first quarter of this year, we achieved financial results in line with our expectations, with an improvement in the average daily shipment volume in the United States. Looking ahead, we expect to return to growth in both volume and revenue levels,” said Carol Tomé, CEO of UPS.
The domestic market remains crucial for UPS, where the company saw revenues of $14.234 billion—a 5% year-over-year decrease, largely due to a 3.2% drop in average daily shipment volume. Operating profit in this segment fell by 43.7% to $825 million.
The international parcel segment also underperformed compared to last year, with revenues down 6.3% to $4.256 billion, and operating profit decreasing by 20.8% to $656 million, attributed to the global economic slowdown and reduced commodity turnover.
Revenues in the supply chain solutions segment declined by 5.3% to $3.216 billion, primarily due to lower forwarding service rates influenced by decreased demand in sea and air transport. Operating profit in this segment fell from $247 million in Q1 2023 to $132 million in January-March 2024.
Despite the challenging start, UPS maintains its financial outlook for 2024, projecting revenues between $92-94.5 billion, up from $91 billion in 2023, with an expected operating margin of 10-10.6%, which should result in an operating profit of $9.2-9.5 billion. The company plans to invest approximately $4.5 billion this year.
FedEx Sees Profitable Quarter Amid Savings Initiatives
FedEx also reported its financial results for the third quarter of the 2023/24 financial year, which ends in May. Quarterly revenues slightly decreased to $21.7 billion from $22.2 billion a year earlier. However, operating profit rose by 19% to $1.24 billion, and net profit increased by 14% to $879 million, thanks to the implementation of the DRIVE savings program.
The express parcel division saw a 2% drop in revenue to $10.1 billion, though operating profit nearly doubled to $233 million. The ground transportation segment reported a 1% revenue increase to $8.7 billion and a 12% increase in operating profit to $942 million. The freight segment, however, experienced a 3% revenue decrease to $2.125 billion, with operating profit declining by 12% to $340 million.
For the current financial year, FedEx anticipates a slight revenue decline in the low single digits, with expected savings from the DRIVE program amounting to $1.8 billion.
DHL Reports Mixed Results but Remains Optimistic
The European courier giant, DHL, owned by the German post office, posted revenues of €20.3 billion in the first quarter of 2024, slightly down from €20.9 billion in 2023. Operating profit for the first quarter amounted to €1.3 billion, slightly below the €1.6 billion generated in Q1 2023 but still above the pre-pandemic figure of €1.2 billion from Q1 2019.
In the express parcel segment, revenues fell by 4.4% year-over-year to €6 billion, with EBIT dropping 30% to €632 million due to weaker demand. The global forwarding segment saw a significant decline of 15.8% in revenues to €4.62 billion, with a 32.4% decrease in EBIT to €263 million, despite increased volumes from Asia to Europe.
Conversely, the supply chain segment experienced revenue growth of 5.5% year-over-year to €4.3 billion, with EBIT improving by 12.8% to €256 million. The e-commerce segment also saw revenue growth of 8.5% to €1.63 billion, although operating profit EBIT decreased by 25.9% to €60 million due to significant investment in network expansion.
In Germany, DHL’s postal and parcel market revenues slightly increased by 1.6% to €4.3 billion, with EBIT jumping over 40% to €194 million, driven almost entirely by the parcel business.
Looking Forward
DHL’s leadership remains optimistic about the future, expecting 2024 to be a year of opportunity despite ongoing challenges.
“With our strategy, we are well-positioned to benefit from the rebound in global trade. 2024 is a year of opportunities,” said Tobias Maier, CEO of DHL Group. For 2024, DHL forecasts an operating profit of between €6-6.6 billion, slightly below the €6.3 billion achieved in 2023, with a target of €7.5-8.5 billion by 2026.
The rebound is anticipated in the second half of the year, according to the company’s report.