This week in parcel, UPS cuts thousands of jobs, delivery giants struggle with their climate goals, and Amazon uses its $1 billion investment fund to improve last mile delivery and automated vehicle technology.
UPS is cutting thousands of jobs
On Tuesday, January 30, UPS announced it will cut 12,000 full- and part-time positions. Additionally, it stated it will look for strategic alternatives for Coyote Logistics, a truckload brokerage it acquired in 2015.
Most layoffs will come during the first half of the year and do not include unionized employees. The positions will be permanently terminated. UPS noted the reduction is part of a new working process.
UPS paid $1.8 billion for Coyote Logistics which at the time was generating nearly $2 billion in annual revenue. However, since the pandemic, the business has struggled. It has had multiple rounds of layoffs in the last year, including one round this January.
Our take: The challenging times for UPS continue with the carrier’s recently reported down quarter. The financial performance confirms that parcel volumes remain low and it continues to be a buyer’s market for parcel shippers. Even if you renegotiated in the past six months, you should consider reviewing your contracts again.
Read more on the layoffs here.
Delivery giants struggle with climate goals
Amazon, UPS, and FedEx have all made pledges to cut their climate footprint, but as demand increases, the delivery giants are struggling to deliver on their promises.
Now, the delivery companies are scaling back. Amazon’s goal of carbon neutrality has been pushed back ten years. UPS has eliminated its emissions-reduction pledge. FedEx’s emissions continue to rise.
The cost and infrastructure required to meet the goals are two reasons these companies are scaling back their efforts. Still, some within the industry wonder why greener alternatives have not progressed faster. After all, delivery giants have advertised greener solutions like electric vehicles for over a decade.
Our take: With sustainability a priority for many shippers, the progress carriers are making concerning reducing emissions in their fleets is something worth watching. This, too, can be a criterion for evaluating carrier selection with your day-to-day routes.
Read more here.
Amazon uses $1 billion investment fund to improve last mile delivery and automated vehicle technology
Amazon is using a $1 billion venture capital fund to expand investment in last mile and automated vehicle technology.
The company only used about a tenth of the Industrial Innovation Fund, which was announced in April 2022, in its first year. However, in the past year, Amazon has also used the fund to invest in several robotic startups, a computer vision company, and workplace safety.
The fund’s director, Franziska Bossart, stated that technology will continue to play a role in fulfillment centers and believes that adopting new technology can expedite orders.
Our take: Amazon continues to invest in delivery and robotics technology that will no doubt position it as an even stronger competitor offering last mile delivery services. We’ll see if UPS and FedEx continue to invest and keep up, or if Amazon can leverage these investments into more small package market share over time.
Read more here.