Logistics Weekly Review: FedEx, UPS

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UPS: United Parcel Service logo
UPS
United Parcel Service

During the past week, UPS (NYSE:UPS) agreed to settle allegations against it regarding the submission of false claims in order to cover late deliveries. Meanwhile, FedEx’s (NYSE:FDX) arm that provides freight forwarding and customs brokerage services, Fedex Trade Networks, announced the opening of a new facility in Atlanta. Below we take quick look at these notable events.

UPS

On May 19, UPS agreed to make a payment of $25 million in order to settle allegations that the company had tried to hide late deliveries by submitting false claims to the U.S. government. [1] As a result of purposely recording inaccurate delivery times, UPS’s customers were kept from claiming refunds against late deliveries. The payment only covers the settlement with the federal government and the state of New Jersey. Since the suit involved the federal government as well as nineteen states, the District of Columbia and the cities of Chicago and New York as plaintiffs, UPS will likely be making more settlements before the suit ends.

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UPS’s stock was stagnant over the week through Thursday. We currently have a price estimate of $111 for UPS. For the year 2015, we estimate revenues of $59.9 billion, compared to a consensus estimate of $59.7 billion, and EPS of $5.19, compared to a consensus estimate of $5.18.

Click here to see our complete analysis of UPS

FedEx

FedEx Trade Networks announced the opening of its new Atlanta gateway office. [2] The office will provide expanded service offerings to customers including a full portfolio of freight forwarding, customs brokerage and distribution solutions. One of the highlights of the office is its proximity to the airport. Coupled with the office’s onsite distribution capabilities, it allows FedEx to provide end-to-end supply chain services to its customers. The office’s operating model will help the company provide cost-effective and efficient solutions for cargo shipments.

FedEx’s stock gained 0.85% over the week through Thursday. We currently have a price estimate of $169 for FedEx. For the year 2015, we estimate revenues of $47.9 billion, compared to a consensus estimate of $47.7 billion, and EPS of $8.90, consistent with consensus estimates.

Click here to see our complete analysis of FedEx

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Notes:
  1. UPS to pay $25 mln to settle some allegations over delivery times, May 19, Reuters []
  2. FedEx trade networks opens new Atlanta gateway facility, May 21, Supply Chain Digital []