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UPS sells trucking unit
- bdcravens 6y agoThis makes sense. There's far more competition for LTL than parcel shipping, and usually, UPS LTL rates aren't the best. (My employer audits and provides contract optimization for UPS parcels; we also have an LTL rate shopping product)
- MHordecki 6y ago> (...) separate from the package deliveries for which UPS is known, is primarily a business-to-business enterprise hauling large industrial cargo in big trucks.
- mtmail 6y agoSame article on bloomberg.com which doesn't require to login https://www.bloomberg.com/news/articles/2021-01-25/ups-to-sell-trucking-unit-under-ceo-s-better-not-bigger-pledge https://www.bloomberg.com/news/articles/2021-01-25/ups-to-se...
- ardy42 6y agoThat one's paywalled for me, too. However, from the snippet in the Bloomberg Law version, it sounds like this unit is separate from package delivery: > Canada’s TFI International Inc. will acquire the unit, one of the largest less-than-truckload carriers in the U.S., UPS said in a statement Monday. The eight-decades-old operation, separate from the package deliveries for which UPS is known, is primarily a business-to-business enterprise hauling large industrial cargo in big trucks. > Tome’s plan to get lean is a change from 2005, when UPS paid about $1.25 billion for...
- duxup 6y agohttps://outline.com/MbSU85 https://outline.com/MbSU85
- cwwc 6y agohere too: https://www.themiddlemarket.com/news-analysis/ups-sells-trucking-unit-for-800m https://www.themiddlemarket.com/news-analysis/ups-sells-truc...
- dang 6y agoWe'll use that instead. Thanks!
- dang 6y agoSwitched from https://news.bloomberglaw.com/mergers-and-acquisitions/ups-to-sell-trucking-unit-under-ceos-better-not-bigger-pledge?usertype=External&bwid=00000177-3a14-dd8f-adff-fa57a3300003&qid=7048241&cti=LSCH&uc=1320028586&et=NEWSLETTER&emc=mrnw_nl%3A10&source=newsletter&item=read-button®ion=digest&access-ticket=eyJjdHh0IjoiTVJOVyIsImlkIjoiMDAwMDAxNzctM2ExNC1kZDhmLWFkZmYtZmE1N2EzMzAwMDAzIiwic2lnIjoiWHRNNjRMR3RveTVLbDRYVC85UHNUOWFPSVlvPSIsInRpbWUiOiIxNjExNjY0MTA5IiwidXVpZCI6IlpUVVBud3BJcEU2R3pXLzFwZCs2bWc9PUt5UFVzakNwa0xOcDA0dVB4bGRlSkE9PSIsInYiOiIxIn0%3D https://news.bloomberglaw.com/mergers-and-acquisitions/ups-t.... Thanks! Edit: Actually, let's use the one that seems to have the least paywallness (https://news.ycombinator.com/item?id=25916965 https://news.ycombinator.com/item?id=25916965).
- rvba 6y agoIs this the "MBA school of divesting so they can become a service company that sell brand and outsources everything"?
- deleted 6y ago[deleted]
- tgtweak 6y agoI think it's closer to the "shed dead weight" theory of any common sense business. TFI is a machine in this space and has acquired double-digit numbers of regional trucking services over the last 5 years. They own enough of them that there is government-level scrutiny when they acquire a new trucking company to ensure they don't have more than 50% of the business in a given region. LTL trucking is a capitally intensive and margin-thin game, if UPS is getting a decade worth of profits of that unit from this deal, which they can allocate elsewhere to better effect, then by all means. Don't dismiss the organizational overhead of running such an entire division, even at the executive level. >UPS Freight generated approximately US$3 billion in revenue in 2020 and was approximately breakeven from an operating income perspective. https://tfiintl.com/en/press_releases/tfi-international-to-acquire-us3-billion-revenue-ltl-carrier-ups-freight-in-approximately-us800-million-enterprise-value-transaction/ https://tfiintl.com/en/press_releases/tfi-international-to-a...
- ornornor 6y ago>UPS Freight generated approximately US$3 billion in revenue in 2020 and was approximately breakeven from an operating income perspective. 800mm for that kind of business seems like a very very good deal for UPS then!
- cpitman 6y agoIt looks like the value of this business unit has dropped though, UPS acquired their LTL operation for $1.2 billion in 2005. Maybe they just about broke even with the operating profit?
- duxup 6y agoLTL (less than truckload) and parcel (what you probably think of UPS doing, individual small packages) are very different businesses. This wouldn't necessarily indicate anything about UPS's parcel business.
- sandworm101 6y agoSo this is material on pallets, but not including household-type moving nor material needing specialized trailers?
- darksaints 6y agoIf you want something that is too big for a box (like crates or pallets) but not big enough to ship a whole truckload, then you ship LTL.
- dwighttk 6y agoWe build pallets of boxes to ship coast to coast. It ends up being less expensive, faster, and the boxes arrive in better condition. Our west coast customers are set up to receive pallets which is nice.
- deleted 6y ago[deleted]
- tyingq 6y agoMostly palletized, but also crates...stuff like say, a pool table. There's also some cases where boxes over LTL makes sense...big boxes that are lightweight. Normal UPS and Fedex charge "dimensional weight", where shipping a large box that's light is charged by size, not weight. Sometimes that pushes the price much higher than LTL.
- duxup 6y agoGenerally pallets are most common, but it can vary.
- S_A_P 6y ago
- mistrial9 6y agoPlease recall that this is the same company that "fumbled" one of the largest public-offerings in its day, to go "global".. followed years of personnel turmoil and missed goals after blaming the teamsters for everything
- cwwc 6y ago[TEXT] United Parcel Service Inc. agreed to sell its short-haul trucking business for $800 million, the first substantial move in the “better-not-bigger” strategy that Carol Tome developed since taking over as chief executive officer in June. Canada’s TFI International Inc. will acquire the unit, one of the largest less-than-truckload carriers in the U.S., UPS said in a statement Monday. The eight-decades-old operation, separate from the package deliveries for which UPS is known, is primarily a business-to-business enterprise hauling large industrial cargo in big trucks. Tome’s plan to get lean is a change from 2005, when UPS paid about $1.25 billion for the trucking unit in an effort to become a one-stop shop for transportation services. She has pledged to increase return on capital investment by focusing on the core parcel business, brand and culture while maintaining UPS’s dividend and investment-grade credit rating. Everything else is under review, Tome said in July. TFI expects the acquisition will add to earnings this year and will increase profit as the company improves efficiency. “This is the most strategic acquisition that TFI has ever done,” CEO Alain Bedard said on a conference call with analysts. Core Business Monday’s “agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers,” Tome said in the statement. The Atlanta-based company will take a $500 million charge related to the sale, which is expected to close in the second quarter. The unit had sales of about $3.1 billion and 14,500 workers last year, according to a UPS presentation. It operated 6,340 tractors and 23,400 trailers in 197 facilities. The business, whose customers include Best Buy Co., Honda Motor Co. and Home Depot Inc., has a “roughly break-even” operating margin, according to TFI. The unit moved cargo at below market rates and was a loss leader for UPS so the courier could offer a bundle of services to customers, Bedard said. He intends to increase prices while retaining customers. Bedard plans to reduce costs by purchasing new vehicles that are more efficient and by streamlining cross-border freight between the U.S. and Canada, among other things. The St Laurent, Quebec, company, which had a market value of C$7.54 billion ($5.91 billion) from Monday’s stock surge, expects to increase sales in Mexico as well. “This opens a lot of opportunity for us,” said Bedard, whose company has made more than 90 acquisitions since 2008. The unit will continue to provide service to UPS under a five-year agreement. The sale won’t affect UPS’s package-delivery business’s operations and will raise the company’s operating margin by 0.2 percentage point, the courier said.
- deleted 6y ago[deleted]
- figital 6y agoUPS Freight has never really been “UPS” even though they sort of share the same computer systems and branding. Their quality of service has also always been much lower (at least in our region).
- RegBarclay 6y agoUPS Freight was an acquisition of Overnite Transportation several years ago. Not sure how much real integration between the companies ever happened beyond branding.
- bombcar 6y agoAt least when I was involved in shipping you could do both from a UPS account - but every company doing major shipments has more than one shipment supplier anyway.
- ROFISH 6y agoAs someone who ships a decent amount of freight via UPS Freight (six time a year, at least), the integration is surface level at best. Yes you can go to the unified billing, but freight was it's own separate section. Yes you can get consolidated package/freight quotes but each had it's own website workflow. Yes you can generate a BOL on the ups.com website but it was way better to use the upsfreight.com website. The Freight API used the same ups.com API server and login, but it was it's own path with it's own xml schema. It was pretty clear that the integration was, at best, surface level. Especially when the package reps and the freight reps had no clue what the other was doing, letting me know that it was just a siloed org.
- Aloha 6y agoThis is the former Overnite transportation business that UPS purchased. https://en.wikipedia.org/wiki/UPS_Freight https://en.wikipedia.org/wiki/UPS_Freight
- bserge 6y agoI recently found that DHL, FedEx and UPS no longer offer express delivery services between the US and some Eastern European countries (or perhaps the whole EU) besides highly expensive next day air delivery. Kind of sad for me, since I used to buy a lot of stuff on various American websites, notably eBay of course, and ship it within a week with DHL or Fedex for a reasonable price. USPS/national post services are alright, but not the best. They take more time and lose packages more often. DHL still has express shipping from China. I wonder if this is directly related to the shift in production. Everything comes from China/Asia these days, there's nothing I can't get there, there's no reason to buy from the US anymore.
- rlonstein 6y agoWhat countries? I recently ordered some motorcycle accessories from Perun Moto in Serbia (really nicely made stuff, btw) and they shipped DHL Express which was reasonable (about $50) and rather fast.
- us0r 6y agoThese guys are absolutely amazing: https://us-west.meest.com/services/service/international-parcel-delivery https://us-west.meest.com/services/service/international-par...
- jmclnx 6y agoThe Real Reason: "UPS is union busting". I was wondering why Amazon is moving to its own delivery service and why UPS is selling. I did a quick search and noticed UPS Tucking is unionized http://teamsterslocal638.org/local-work-sites/ups/ http://teamsterslocal638.org/local-work-sites/ups/ So UPS wants to dump the union before the new US admin starts looking at Labor.
- creddit 6y agoThe rest of UPS has a union as well. This is not the reason. Why make this reason up? https://teamster.org/divisions/package-division/ https://teamster.org/divisions/package-division/
- mchusma 6y agoHave friends at UPS, can confirm it's all union, and it's really baked into their culture.
- athriren 6y agothe drivers on the brown delivery vans are unionized too, as opposed to FedEx, which uses all contractors.
- hef19898 6y agoAs does Amazon. You can tell by the driver's yellow badges. Not that Amazon is trying to hide that, so.
- duxup 6y agoUPS already is a union shop. Selling an LTL business doesn't change anything...
- AnimalMuppet 6y agoSo bought it for $1.25 billion, sold it for $800 million 16 years later. That's kind of painful. Of course, the execs who made the decision to buy it are almost certainly long gone...
- tandr 6y agoWell, if this unit was making constant money over 16 years (directly and indirectly), and have paid for itself already, it is not a bad move.
- jessaustin 6y agoYeah the theory is that the price of a business reflects its future income.
- pasttense01 6y agoThe basic reason is the UPS trucking is unionized and its LTL competitors are mostly NOT unionized. This basically resulted in UPS trucking having higher costs than its competitors. So it ended up not being profitable.
- neonate 6y agohttps://archive.is/2BqHT https://archive.is/2BqHT
- saltyshake 6y agoThey once overnighted Tom Cruise' car https://youtu.be/Ok2NWF53bUY https://youtu.be/Ok2NWF53bUY