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UPS explores same day delivery



United Parcel Service Inc. exploring an opportunity the same day, a delivery model that has been used by gig-economy players as the pandemic has accelerated the transition to e-commerce.

“We do not have a product the same day today, so we are looking at it,” CEO Carol Tomé said in response to a question on an investor day webcast on Wednesday. “We do not have it all, but we have a team of people looking at it.”

She said the company is testing the concept and does not offer other details. A UPS spokesman said the company did not comment on its pilot programs. The idea comes as the acceleration of e-commerce has pushed retailers to add more options for delivery and same day.

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Amazon.com Inc., one of UPS̵

7;s largest customers, and Instacart Inc. is among the current same-day delivery providers. Target Corp. owns Shipt, which delivers same day from its stores as well as from chains such as CVS and Petco. Food delivery services like DoorDash Inc. and Uber Technologies Inc. has expanded to groceries during the pandemic, although profits have been elusive.

UPS and rival FedEx Corp. have long been providing overnight services, but they generally do not deliver packages the same day they receive them. Both companies have started offering services where they pick up packages from some stores in the evening and deliver them the next day. FedEx offers same day services in limited markets. It has also tested robots that could deliver medicines, pizzas and other items to consumers’ homes.

Ticker Security Last Change Change %
UPS UNITED PARCEL SERVICE, INC. 201.06 -8.70 -4.15%
FDX FEDEX CORP. 293.11 -9.47 -3.13%
TGT TARGET CORP. 231.94 -3.16 -1.34%
UBER UBER TECHNOLOGIES, INC. 49.14 -0.74 -1.48%
AMZN AMAZON.COM, INC. 3,281.15 +17.04 + 0.52%

UPS’s technology infrastructure for ordering and tracking packages could place it well to pursue the delivery model, although it is unlikely the company will go for already popular services such as food or food delivery, said Jeffrey Kauffman, a transportation and logistics analyst at Vertical Research Partners LLC.

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“My guess is that e-commerce will continue to grow this market,” said Mr. Kauffman on the same day market for services. “It’s a market worth exploring.”

UPS set economic targets on Wednesday, saying it expects revenue to rise to about $ 98 billion to $ 102 billion by 2023, but it set profit targets that were below some Wall Street forecasts. In 2020, UPS had an operating profit of $ 7.68 billion on revenue of $ 84.63 billion.

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UPS shares fell 4% in Wednesday’s trading. The stock has roughly doubled over the last 12 months.

Ms Tomé, who took over as CEO a year ago, has adopted a strategy to become more selective in terms of the packages the company accepts, as well as raising prices and enforcing volume limits.

UPS said Wednesday that it is counting on delivery of small packages and among small and medium-sized businesses to create growth.


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