From 11,000 to 800 job openings in 2 months: UPS's dependence on e-commerce visualized
UPS ($NYSE:UPS) earnings are in, and they're down. The logistics company lost $106 million, or 12 cents a share. This came after the shipping giant took a $1.8 billion hit for its pension plan.
But volume is up — the company cited 26.6 million daily packages, up 7.5% from last year, largely due to massive growth in e-commerce and a deep partnership with Amazon.
Heavy reliance on e-commerce partners, however, have given UPS a somewhat ephemeral cycle, as hiring trends from the past two years show.
Take the past two holiday seasons, for instance. In October of both 2018 and 2019, UPS job listings hit high marks of 11,000 openings as it scrambled to meet demand for the holidays. But, in both cases, by the new year, openings dropped to around 1,000.
This massive cycle illustrates not only how huge partners like Amazon have become for UPS, but it also serves to illustrate what some analysts are calling a potentially troublesome dependency. In December, for instance, Amazon blocked its own third-party marketplace sellers from using FedEx ground delivery for Prime services.
The Amazon-FedEx breakup hurt FedEx — it even called its own profit drop "horrific" — and its stock has shown as much, especially since December.
While UPS is still a go-to logistics partner for Amazon, it's clear that the relationship is not set in stone, and given the cyclical nature of the business as illustrated in the hiring trends here, it comes as little surprise that investors are ho-hum on the business after earnings didn't prove them wrong today.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.