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Estimated 5% of UPS’ daily parcels diverted due to strike concerns

ShipMatrix said about 1 million daily parcels were diverted to FedEx

UPS hikes 2024 tariff rates by 5.9% to match FedEx (Photo: Jim Allen/FreightWaves)

UPS Inc. (NYSE: UPS) lost about 5% of its domestic average daily volume, almost exclusively to rival FedEx Corp., (NYSE: FDX) due to shipper concerns over a possible strike by the Teamsters union, according to consultancy ShipMatrix Inc.

ShipMatrix, which compiles extensive data on industry trends and issues, said about 1 million parcels were diverted daily to FedEx in the days and weeks leading up to a tentative agreement announced last Tuesday. The percentage of diversion is based on UPS handling, on average, 18.6 million domestic parcels per day as of the end of the first quarter, ShipMatrix said.

Satish Jindel, ShipMatrix president, said about half of the diverted parcels will remain with FedEx because the prices offered were lower than what UPS would charge.

Diversion to other providers like the U.S. Postal Service, regional carriers and parcel consolidators that aggregate large volumes to induct into the Postal Service’s delivery network was statistically insignificant, Jindel said.

UPS’ 340,000 rank and file now have three weeks to review, ratify or reject the contract on an up-or-down majority vote. Voting ends on Aug. 22.

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  1. Dave

    Why the hell did Sean Obrien go public and announce to whole wide world that “a strike is imminent” scaring away our custmers to Fedex. Yes we are getting a raise but whats the point if we are losing alot of market shares. Instead of taking a victory laps why don’t Sean go talk to Carol and see how we can get those customers back.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.