It's that gift-giving time of the year again and freight
forwarding carriers like
United Parcel Service Inc.
) are bracing up to make the most of it. UPS - which is seeing
holiday season - announced several promotional events on Nov 22
that will benefit customers and small business houses.
The news stirred optimism in the market and the company's
share price gained nearly 1% since opening last Friday.
The company has tied up with Twentieth Century Fox Home
Entertainment, which is a home video distribution unit of
Twentieth Century Fox Film Corporation for the release of
Blu-ray, DVD and Digital HD release of Percy Jackson-Sea of
Monsters. Both these companies will co-host a special media event
on Dec 16 in Atlanta.
UPS is also hosting a 'Pin It To Win It' promotional event in
which customers can put up their favorite holiday wish list
images on the photo-sharing websitePinterest's board titled "UPS
Delivers Holiday Gifts." Further, the company is offering
discounts of up to 16% off air and international shipping and 8%
on ground services to support small businesses.
We expect UPS to win more customers with its host of
promotional events and see record shipment on peak days. This
would in turn translate into revenue growth.
We attribute the surge in the shipment largely to the growing
market of e-commerce. The easy access to products through online
shopping has not only benefited consumers but has also uplifted
freight forwarding business of companies UPS and
), which are major providers of shipping services in
To benefit further, UPS has also raised its fright rates.
Recently, the company announced rate hikes for 2014. The company
is increasing rates for UPS Ground, Air and International, and
Air Freight in U.S., Canada and Puerto Rico and across these
markets by 4.9%. We believe the rate hikes will add to the
company's revenues and expand margins going forward.
Given the strengthening of freight market fundamentals, UPS
remains successful in implementing rate hikes. Further, the
softness in U.S. postal service's business has also aided it to
gain significant market share.
UPS, which operates with other carriers like
Expeditors International of Washington Inc.
Radiant Logistics, Inc.
), has a Zacks Rank #3 (Hold
EXPEDITORS INTL (EXPD): Free Stock Analysis
RADIANT LOGIST (RLGT): Free Stock Analysis
UTD PARCEL SRVC (UPS): Free Stock Analysis
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