UPS vs. FedEx - WDRB 41 Louisville News

UPS vs. FedEx

Rival FedEx Corp., based in Memphis, Tenn., shipped 14.1 million packages on Dec. 14. That beat the company's projection for its peak day of the year by more than a million and was the busiest day in FedEx history, topping the total of about 12 million packages shipped on its peak day last year. FedEx Corp. ships about 7.5 million packages on an average day.

FedEx's ground unit added about 14,000 part-time and temporary workers during November and December. At FedEx Express, existing employees work overtime during the holiday season, so there were no seasonal hires there.

Peak projections from UPS and FedEx are closely watched because they tend to indicate how the broader economy is doing. Economists use FedEx and UPS volume to help track how much consumers are buying, because the companies transport so many retail goods.

The deep economic recession has taken a toll on the shipping giants.  Over the last year, FedEx laid off workers and cut wages for thousands of employees to cut costs. But the company announced this past week that it will resume merit salary increases in 2010, as well as a 50 percent resumption of the 401(k) company match for most U.S. employees.

UPS said it would reduce its 2009 capital expenditures to $1.7 billion, down $500 million from its initial budget. Its profits and sales were down in the third quarter.

FedEx recently reported lower second-quarter earnings and offered a cautious outlook for its third quarter, which ends in February. But the company thinks shipping volume could continue to pick up after that as the economy improves.

Both companies see a chance to win over new customers who only ship during the holidays.  UPS spokesman Norman Black said the holiday shopping season seems to be more compressed, in part because of the growing popularity of online shopping and bargain hunting for last-minute deals.

"The real success of the holiday season will probably be determined in those eight or nine days before Christmas," said UPS CEO Scott Davis.

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