Logistics Weekly Review: FedEx, UPS

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UPS: United Parcel Service logo
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United Parcel Service

During the past week, UPS (NYSE:UPS) announced that it will be accelerating the launch of its route optimization software, ORION. Meanwhile, FedEx (NYSE:FDX) faced protests from its pilots due to the continued delay in discussions about pay and working conditions. Below we take quick look at these notable events.

UPS

UPS recently announced that it will be accelerating the launch of ORION, which will help reduce the distance traveled by its drivers in the U.S. by 100 million miles annually when fully implemented in 2016. [1] By the end of 2015, ORION will be deployed on 70% of U.S. routes. The ORION software is a route optimization software that is intended to improve delivery times and decrease fuel expenses for its ground fleet. The deployment will also help reduce carbon dioxide emissions, vehicle maintenance costs and save 10 million gallons of fuel annually.

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UPS’s stock declined 1% over the week through Thursday. We currently have a price estimate of $110 for UPS. For the year 2015, we estimate revenues of $60.8 billion, compared to a consensus estimate of $60.3 billion, and EPS of $5.19, compared to a consensus estimate of $5.17.

Click here to see our complete analysis of UPS

FedEx

On March 1, more than 700 FedEx pilots participated in a rally to demonstrate their dissatisfaction against the delay the company’s management has been causing in bargaining over pay and work conditions. [2] Discussions have been ongoing since 2011.

FedEx’s stock declined around 1.2% over the week through Thursday. We currently have a price estimate of $164 for FedEx. For the year 2015, we estimate revenues of $48.0 billion, compared to a consensus estimate of $47.7 billion, and EPS of $8.70, compared to a consensus estimate of $8.90.

Click here to see our complete analysis of FedEx

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Notes:
  1. UPS Accelerates Use of Routing Optimization Software to Reduce 100 Million Miles Driven, March 2, 2015, www.ups.com []
  2. Hundreds of FedEx Pilots Participate in Contract Rally, March 2, 2015, www.businesswire.com []