UPS signals post-pandemic slowdown

The health crisis created a boom in business for United Parcel Service as it frantically delivered everything from food and furniture to medical masks and vaccines, but investors doubt the world's largest package delivery company will see a repeat surge in business now that economies are opening up and vaccinated Americans are getting out of the house.

Worries about the package delivery business picked up Wednesday after UPS issued a 2023 sales forecast that was at the low end of analysts targets.

Not only is UPS preparing for a drop-off in package volumes, its also going to have to drop the health-crisis surcharge it slapped on deliveries. At the same time as it grapples with those expected revenue declines, Amazon.com, its No. 1 customer, is looking for ways to squeeze-out UPS by making deliveries itself.

In order to offset the expected slowdown in business, UPS is focusing on bulking up deliveries for the healthcare industry, as well as small-to-medium sized businesses. That group is more likely to pay fuller price, since they lack the scale needed to negotiate delivery discounts.

UPS on Wednesday also said it is considering the expansion of Saturday deliveries across the U.S., and "looking" into same-day delivery service.

These plans for the future failed to deliver the confidence investors were looking for.

The stock, which has nearly doubled over the past year, fell on Wednesday.

And it was not alone. So did shares of rival FedEx.

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