UPS sees record-high profits; expands delivery to 7 days

A UPS truck is parked on the street in Chicago on July 22. Christopher Dilts/Bloomberg

UPS will begin picking up and delivering packages seven days a week starting in 2020, and it will add more than 10,000 new stores to its network of package pickup locations.

UPS said it is expanding its Saturday pickup and delivery service and adding Sunday pickup and delivery options, with the seven-day-a-week service starting Jan. 1.

The company also reported record profits for the second quarter of 2019, with nearly $1.7 billion in net income, up 13.5 percent. That includes domestic growth led by a more than 30 percent increase in Next Day Air volume, driven by faster delivery requirements from e-commerce shippers.

UPS said it will offer its seven-day operation by combining its delivery network with UPS Access Point retail partner locations and SurePost partnership with the U.S. Postal Service.

The company’s latest union contract created a new classification for drivers handling weekend shifts to help handle the surge in demand for deliveries from online shopping.

And the postal service has “the potential for a Sunday capacity that matches a Wednesday’s capacity,” said UPS chief strategy and transformation officer Scott Price. “Overall, that’s really where the market’s going. ... A Sunday will start to feel like a Wednesday.”

UPS also said it will expand its network of Access Points that allow customers to pick up or drop off packages at retail store partners, by adding Michaels, CVS Pharmacy and Advance Auto Parts stores for an additional 12,000 locations.

UPS said soon, more than 90 percent of U.S. consumers will have an Access Point location within five miles of their homes.

The company is also looking to drones to augment its delivery network, announcing this week that it has applied for Federal Aviation Administration certification for a drone delivery service through a subsidiary called UPS Flight Forward Inc. UPS said it expects to get FAA Part 135 certification, often used by charter operators, this fall.

The company plans to initially use the drone subsidiary to expand recently launched medical campus drone deliveries to more hospital, clinic and health care education facilities. But that could be expanded, Price said.

New York Times

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