(Reuters) – United Parcel Service on Tuesday cut its 2023 revenue and margin forecasts, hurt by slowing demand for deliveries and rising wages for its employees.
The Atlanta-based courier and logistics group now expects its 2023 consolidated revenue to be around $93 billion, down from an earlier forecast of around $97 billion.
In the second quarter, its revenue fell about 11% to $22.1 billion.
The adjusted operating margin forecast for 2023 has been revised to around 11.8%, against a target of 12.8% previously.
On the New York Stock Exchange, the UPS title lost 6.6% in pre-market trading.
Last month, UPS and the Teamsters union, which represents 340,000 workers, signed a five-year interim agreement aimed, among other things, at raising wages for UPS workers. The goal was to avert a strike that could have cost the US economy billions of dollars and disrupted a quarter of the country’s package shipments.
The agreement also included a new paid holiday and the installation of air conditioning in new models of delivery trucks. The two-tier pay system and mandatory overtime for delivery drivers have also been scrapped.
Meanwhile, the slowdown in global shipping, which has squeezed industry margins, has forced logistics companies to balance costs and capacity to meet lower demand.
(Priyamvada C report in Bangalore; Gaëlle Sheehan)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
