UPS Defies Trade Gloom With New Saturday Service for Exports

(Bloomberg) -- United Parcel Service Inc. has begun processing export shipments on Saturday to help U.S. retailers gain a day on overseas e-commerce deliveries as trade tensions threaten to weaken international demand.

The move is part of the courier’s strategy to boost profit by gaining more business from smaller companies. Expanding Saturday service for overseas packages, which previously was limited to pickups, will help retailers get exports moving six days a week and offer rush orders over the weekend.

“One day makes a big difference when it comes to your international customers deciding to place an order,” said Nando Cesarone, president of UPS International. “We’re seeing significant opportunities for U.S. businesses, especially small-and medium-sized online retailers, to export their quality products to high-growth international markets.”

There’s plenty of room for American businesses to expand exports, UPS said, citing a U.S. Small Business Administration report that showed less than 1 percent of the 30 million U.S. companies have export sales. Of those companies, 58 percent export to only one country.

“We’re trying to inspire those smaller customers to really do business outside of the U.S,” Cesarone said.

Focusing on services for small-business and health-care customers is one way UPS can improve profit margins, UPS CEO David Abney said at a September meeting with analysts.

Trade Impact

A brewing trade war between China and the U.S. -- the world’s two largest economies – is pressuring American exporters as it begins to impact global growth expectations. The world economy is expected to decelerate to 3.5 percent this year and to 3.3 percent in 2020 after expanding 3.7 percent in 2018, according to a Bloomberg survey of economists.

UPS added Saturday deliveries in the U.S. in 2017 as the company sought to keep up with a surge in e-commerce shipments. A new class of driver that would work weekends under a five-year labor contract that was ratified in October gives UPS more flexibility if it decides to begin Sunday service, as well.

To contact the reporter on this story: Thomas Black in Dallas at tblack@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren

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