UPS REPORTS IMPRESSIVE 2020 FINANCIAL RESULTS
05 May 2021
Did you know United Parcel Service (UPS, as they are known) is the worlds largest and most profitable express freight company?
UPS, is based in Atlanta, Georgia, USA. UPS was founded and commenced operations in 1907 (back then it was called The American Messenger Company), by James E Casey(who was 19 years old) and Claude Ryan, together they borrowed $100.00 to establish the business . Back then parcels were delivered by bicycle or on foot.
In 1912 UPS opened their second office and changed the trading name to Merchants Parcel Delivery, the first delivery truck was a Model T Ford, introduced in 1913. Charles Soderstrom started work with Merchants Parcel Delivery in 1916 and it was his idea to use the colour brown, the thinking being the darker colour would hide dirt and grime on the company delivery vehicles. One of the partners, Ryan sold his share of the company and departed in 1917, not long after Casey opened another office in Oakland, California, this is where the company started using the name United Parcel Service and by 1925 the company was known throughout the USA as United Parcel Service or UPS.
In the early 1930’s UPS moved its headquarters to New York City and continued to open offices and expand.. UPS did not start offering air freight services fully ( air freight service offered briefly in 1929 but dropped) until 1953. Offering air freight services MEANT UPS had entered the “overnight air courier” market. UPS AIRLINES was established in 1988 and was run from a “main hub” in Louisville ,Kentucky. The company headquarters were moved again to 1991 to Sandy Springs in Georgia a suburb of Atlanta.
During 2001 UPS purchased Mail Boxes etc, this gave the company retail outlets which they then renamed to “UPS STORE”. UPS STORE offered the public and small business, secretarial services , mailbox and courier services. In 2020 UPS STORE had more than 500 locations across the USA.
The founder, Casey passed away in 1983, he was with the company right up till his death. Shares in the company were held by company executives and Casey family members at the time of the founders death. Shares in UPS were not traded until 1999.
Today UPS is the world’s largest express freight company, delivering 5.5 billion packages per year and has with an annual turnover in excess of US$80 billion. In the financial year ending 2020 UPS recorded a profit of close to 10% of consolidated revenue, an awesome result by any standards. To give us an idea of how well UPS is performing just take a look at Australia Post, a much smaller but comparable business , which turns over in excess of A$7 billion and reports a paltry A$45 million (approx.) profit last financial year (2020) and Australia Post has no real competitors! How Australia Post is really performing we don’t really know for sure because the clever Australia Post board and CEO have managed to mix the Star Track business into the overall results without divulging Star Tracks Profit! Without Star Track would Australia Post make money? probably not!
“Australia Post Shenanigans’ Boring”
The concerning aspect about all this is that The Australia Government by way of its announcements and the Post Chairman, Board members and CEO (previous) all seem to think the results are rather good and they are doing really well! In-fact so good, that they can pay executives millions, upon millions of $ in bonus’s, give away Cartier watches ( as an incentive?) and have the CEO staying in the Hyatt as digs!, Its just laughable , shannagins ! Did you know the Australia Post Directors earn approx A$100,000 per year to turn up for a total of 9 meetings per year!, “a nice little earner, ” How lucky would one feel being an Australia Post executive and fronting up to collect your million dollar bonus? on top of your A$700,000 annual salary and over generous company superannuation plan, yes, smiles and handshakes all round thank-you Australia Post! One can only imagine, it must feel like winning lotto! If i was an executive of the company I would recommend not selling Australia Post too!
Back in the real world and more about fortune 500 company UPS.
William Johnson is UPS’s Chairman of the Board and the current CEO of UPS is Carol Tome, who earns US$ 1.25 million per annum plus incentives (similar amount to the CEO of Australia Post!). In the 2020 financial year UPS turned over US$82 BILLION. With a reported US$ 56 billion in assets, UPS is number 43 on the Fortune 500 companies list. One risk factor to note with UPS is that Amazon accounts for about 10% of UPS’s annual consolidated revenue in 2020.
The company has the largest on ground fleet of vehicles in the world (119,000) and comes second, after great rival, FEDEX for the largest fleet of aircraft (280 active, all jet fleet) . UPS is renowned for its investing in advanced technology systems, the company has a market capitalization of US$ 184.2 billion and operates in over 220 countries and employs in excess of 500,000 people.