UPS Inc. (NYSE: UPS) lost about 5% of its domestic average daily volume, almost exclusively to rival FedEx Corp., (NYSE: FDX) due to shipper concerns over a possible strike by the Teamsters union, according to consultancy ShipMatrix Inc.
ShipMatrix, which compiles extensive data on industry trends and issues, said about 1 million parcels were diverted daily to FedEx in the days and weeks leading up to a tentative agreement announced last Tuesday. The percentage of diversion is based on UPS handling, on average, 18.6 million domestic parcels per day as of the end of the first quarter, ShipMatrix said.
Satish Jindel, ShipMatrix president, said about half of the diverted parcels will remain with FedEx because the prices offered were lower than what UPS would charge.
Diversion to other providers like the U.S. Postal Service, regional carriers and parcel consolidators that aggregate large volumes to induct into the Postal Service’s delivery network was statistically insignificant, Jindel said.
UPS’ 340,000 rank and file now have three weeks to review, ratify or reject the contract on an up-or-down majority vote. Voting ends on Aug. 22.
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The day before F3. Every compliance issue you face - fraud exposure, carrier liability, FMCSA rules, cargo theft, insurance gaps - navigated by attorneys and operators defining best practices in a changing industry.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowThe night before F3. FreightTech100 companies honored. FreightTech 25 and Shipper of Choice winners revealed live. Cocktail reception into dinner and live music - 300 industry leaders in one purpose-built room.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register NowIndustry-defining keynotes, rapid-fire technology demos, and industry leaders networking in experiences across Chattanooga - plus the inaugural F3 Awards Dinner featuring the FreightTech and Shipper of Choice reveals.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now