Tag Archives: UPS-United Parcel Service

UPS pilots picket the UPS investor conference

The Independent Pilots Association, representing the pilots of UPS-United Parcel Service (UPS Airlines) (Atlanta and Louisville) provided an informational picket line yesterday (November 13) at the 2014 UPS Investor Conference. The union issued this statement:

The UPS pilots, represented by the Independent Pilots Association, conducted an information picket at the 2014 UPS Investor Conference held at the Grand Hyatt New York.

“We conducted this picket to inform the investment community that UPS has neglected its airline operations by failing to finalize the pilot contract,” said IPA President, Captain Robert Travis. “We prefer to reach a negotiated agreement with UPS, but with our talks now entering a fourth year, we question whether UPS is equally committed to a resolution.”

“UPS pilots have reaffirmed our intention to fly this Christmas by not seeking a release from the National Mediation Board. This holiday season, we remain committed to safe and reliable delivery,” said Travis. Under the Railway Labor Act a request for release, if granted by the NMB, could lead to a 30-day countdown to a strike, or lockout.

The IPA invites the investment community to learn more about its dispute with UPS at http://www.ipapilot.org. “Investors will want to stay informed. As UPS pilot labor talks continue, we will keep you apprised of developments” said Travis.

UPS and IPA have been following the Railway Labor Act process for the last 39 months; direct negotiations for 29 months and mediated talks for the past 10 months. Direct negotiations began in September 2011 and continued through January 2014. In early 2014, UPS and IPA jointly requested federal mediation. The National Mediation Board docketed the case in February 2014 and assigned a staff mediator to oversee further negotiations. The parties have been in mediated talks since February 2014.

The Independent Pilots Association represents the 2,600 pilots who fly globally for United Parcel Service.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 747-4R7F N582UP (msn 29053) lands in beautiful Anchorage, Alaska.

UPS aircraft slide show: AG Slide Show

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The NTSB blames the crew for the crash of UPS flight 1354 at Birmingham, Alabama

UPS A300-600F N155UP Crash Birmingham (NTSB)(LRW)

The National Transportation Safety Board determined that UPS flight 1354 crashed because the crew continued an unstabilized approach into Birmingham-Shuttlesworth International Airport in Birmingham, Alabama. In addition, the crew failed to monitor the altitude and inadvertently descended below the minimum descent altitude when the runway was not yet in sight.

The board also found that the flight crew’s failure to properly configure the on-board flight management computer, the first officer’s failure to make required call-outs, the captain’s decision to change the approach strategy without communicating his change to the first officer, and flight crew fatigue all contributed to the accident.

The airplane, an Airbus A300-600, crashed in a field short of runway 18 in Birmingham on August 14, 2013, at 4:47 a.m. The captain and first officer, the only people aboard, both lost their lives, and the airplane was destroyed by the impact and a post-crash fire. The flight originated from UPS’s hub in Louisville, Kentucky.

“An unstabilized approach is a less safe approach,” said NTSB Acting Chairman Christopher A. Hart. “When an approach is unstable, there is no shame in playing it safe by going around and trying again.”

The NTSB determined that because the first officer did not properly program the flight management computer, the autopilot was not able to capture and fly the desired flight path onto runway 18. When the flight path was not captured, the captain, without informing the first officer, changed the autopilot mode and descended at a rate that violated UPS’s stabilized approach criteria once the airplane descended below 1,000 feet above the airport elevation.

As a result of this accident investigation, the NTSB made recommendations to the FAA, UPS, the Independent Pilots Association and Airbus. The recommendations address safety issues identified in the investigation, including ensuring that operations and training materials include clear language requiring abandoning an unstable approach; the need for recurrent dispatcher training that includes both dispatchers and flight crews; the need for all relevant weather information to be provided to pilots in dispatch and enroute reports; opportunities for improvement in fatigue awareness and management among pilots and operators; the need for increased awareness among pilots and operators of the limitations of terrain awareness and warning systems — and for procedures to assure safety given these limitations.

A synopsis of the NTSB report is available at: http://www.ntsb.gov/investigations/2013/birmingham_al/birmingham_al.html

Top Copyright Photo: NTSB.

UPS Aircraft Slide Show: AG Slide Show

Bottom Copyright Photo: Ken Petersen/AirlinersGallery.com. N155UP is pictured on the cargo ramp at New York’s John F. Kennedy International Airport before the tragic accident. Airbus A300F4-622R N155UP (msn 841) crashed on August 14, 2013 while on approach from the north to Birmingham-Shuttlesworth International Airport, Birmingham, Alabama. The crew was operating cargo flight 5X 1354 from the Louisville hub to Birmingham. The two crew members were tragically killed in the crash.

UPS pilots want cargo pilots to be included in Part 117 regulations due to crew fatigue

UPS Airlines’ (United Parcel Service) (Atlanta and Louisville) pilots, represented through the Independent Pilots Association, have issued this statement concerning the current regulations excluding cargo pilots from Federal crew rest standards:

On the eve of the first anniversary of the fatal crash of United Parcel Service Flight 1354, UPS pilots are calling for an end to the carve-out of all-cargo airline operators from FAR Part 117, the new pilot rest and operating rules enacted by Congress. On August 14, 2013, at 4:47 AM CDT, UPS Flight 1354 crashed on approach to Birmingham-Shuttlesworth International Airport, killing Captain Cerea Beal, Jr. and First Officer Shanda Fanning.

“What we didn’t know then, but suspected, was the role fatigue played in this accident,” said Captain Robert Travis, President of the Independent Pilots Association. “Once the Cockpit Voice Recorder transcripts were released there was no doubt. Cerea and Shanda told us on the CVR* that they were fatigued and wanted one level of safety in commercial aviation.”

Part 117, which became effective for passenger carriers on January 4, is the first major revision of pilot flight and duty limits and rest requirements in 60 years. This new rule is science-based and designed to mitigate fatigue among commercial pilots. Disturbingly, all-cargo airlines are carved out of Part 117 for “political” reasons, as noted last week by the FAA’s Federal Air Surgeon, Dr. James Fraser.

“This carve-out puts our nation’s entire aviation system at risk,” said Jim Hall, former Chairman of the National Transportation Safety Board. “A tired pilot is a tired pilot, regardless of the plane he or she may be flying. By excluding cargo pilots from Part 117, the FAA is failing to adhere to its mission of making safety the first priority in aviation. If the FAA believes even one life lost in an accident is too many, the principle should also apply to cargo pilots.”

From the moment the FAA announced the cargo carve-out, the IPA has fought to reverse it. This includes suing the FAA.

“We had no choice but to lead this fight,” said Travis. “The crash of UPS Flight 1354 has intensified our efforts. Tragically, Capt. Beal said to our Scheduling Committee Chairman just before the fatal flight, ‘these schedules over the past several years are killing me.’ We owe it to Cerea and Shanda, their families and every pilot, whether flying passengers or packages, to end this dangerous exclusion. As we mark this difficult anniversary, I call on the FAA to end the cargo carve-out and apply one level of safety to all commercial aviation.”

Copyright Photo: Ken Petersen/AirlinersGallery.com. Airbus A300F4-622R N155UP (msn 841) crashed on August 14, 2013 while on approach from the north to Birmingham-Shuttlesworth International Airport, Birmingham, Alabama. The crew was operating cargo flight 5X 1354 from the Louisville hub to Birmingham. N155UP is pictured on the cargo ramp at New York’s John F. Kennedy International Airport before the tragic accident.

UPS:

UPS produces an operating profit of $1.5 billion in the first quarter, down $106 million due to harsh winter weather

UPS (United Parcel Service) (UPS Airlines) (Atlanta) today released first quarter 2014 results. Diluted earnings per share totaled $0.98, a $0.06 decline from first quarter 2013 adjusted results. Operating profit for the quarter was $1.5 billion, down $106 million from the prior-year’s adjusted results. Unusually harsh weather weighed on operating profit by approximately $200 million, due to increased expenses and slower revenue growth. Average daily shipments in the U.S. climbed 4.2% driven primarily by large e-commerce shippers using lightweight deferred shipping solutions.

The International segment operating margin expanded to 14.0% on daily volume growth of 7.9%. Supply Chain and Freight experienced improved operating profit and margin expansion.

For the first quarter of 2013, UPS reported diluted earnings per share of $1.08, which includes $36 million in after-tax gains related to the attempted acquisition of TNT.

“Much of the U.S. economy was negatively affected by the severe weather conditions in the first quarter, resulting in lower UPS operating results versus the prior year,” said Scott Davis, UPS chairman and CEO. “International and the Supply Chain and Freight segment benefitted from positive momentum during the quarter as customers utilized the strategic investments made by UPS to strengthen our portfolio.”

Cash Flow

For the three months ended March 31, UPS generated $1.9 billion in free cash flow. The company paid dividends of $596 million, up 8.1% per share over the prior year, and repurchased 6.8 million shares for approximately $660 million.

U.S. Domestic Package

U.S. Domestic revenue increased 2.6% over the prior-year period, to $8.5 billion. Daily volume improved 4.2%, led by UPS SurePost and UPS Second Day Air.

The segment generated $927 million in operating profit, down $158 million compared to the prior year, due to the impact of severe winter weather. The company experienced lost revenue and additional cost as a result of significant network disruptions on more than half of the operating days during the quarter. Overtime wages, purchased transportation and snow removal costs increased substantially over the prior year. Operating margin contracted 220 basis points to 10.9%.

Revenue per package declined 1.5% from the previous year due to changes in customer and product mix, as well as lower fuel surcharges. Product mix continues to be impacted by the rapid increase of UPS SurePost. More e-commerce retailers are choosing this product to serve their value-conscious customers.
International Package

The International segment revenue improved 5.0% and produced operating profit of $438 million, 12% more than the prior-year adjusted results. Operating margin expanded to 14% driven by improved network efficiency and in-country leverage.

On a reported basis, the segment recorded operating profit growth of 24% more than the prior-year result of $352 million. This reflects the operating profit impact of a $39 million net charge in 2013, related to the attempted acquisition of TNT.

Export shipments climbed 7.7% driven by 15% growth in Europe and modest gains in Asia and the Americas. Transborder shipments in Europe continue to expand rapidly as customers migrate to Pan-European distribution using UPS solutions.

To support strong Intra-European growth and intercontinental trade, the company announced the completed expansion of its Cologne, Germany, air hub. This $200 million investment increased facility capacity by 70%.
Non-U.S. Domestic deliveries increased 8.1%, driven by growth in Europe and Canada. Poland led the European countries with more than 20% growth, while Germany and the U.K. contributed strong gains.

Average revenue per package declined 2.1% due to product mix changes as non-premium Export products jumped almost 13%, overshadowing improved growth in premium products.

Supply Chain & Freight

Supply Chain and Freight operating profit increased 3.5% to $148 million. Operating margin expanded 30 basis points to 6.8%, driven by gains in the Forwarding and Distribution units.

The Forwarding business delivered improved operating profit and margin gains during the quarter as the unit adapted to market changes. International Air Freight growth in shipments and tonnage were offset by lower revenue per pound. Ocean Freight and Brokerage showed both improved revenue and operating profit.
Gains from retail and healthcare customers drove higher revenue growth in the Distribution business unit.

Operating profit improved more than 10% despite additional expansion costs during the quarter.

UPS Freight revenue increased slightly on a 3.1% increase in LTL revenue per hundredweight. Both tonnage and operating profit were negatively impacted by the severe winter weather.

Outlook

“During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather,” said Kurt Kuehn, UPS chief financial officer. “We are encouraged by the positive trends in our business and expect the remainder of the year to perform as we originally guided. However, due to the challenging start to 2014, we anticipate diluted earnings per share to be at the low end of our full-year guidance range of $5.05 to $5.30.”

Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-34AF ER N328UP (msn 27754) in Blended Winglets prepares to land at Philadelphia International Airport (PHL).

UPS Airlines: AG Slide Show

 

NTSB Chairperson Hersman briefs the media on hearing into crash of a UPS Airbus A300 in Birmingham, Alabama

UPS A300-600F N155UP Crash Birmingham (NTSB)

NTSB Chairperson Hersman briefs the media after investigative hearing into Alabama UPS cargo airplane crash last August.

NTSB is also investigating Monday’s turbulence accident involving United Airlines flight 1676.

Read the full story of the United incident: CLICK HERE

Video:

UPS posts a net profit of $1.2 billion for 2013

UPS (United Parcel Service) (UPS Airlines) (Atlanta) posted net earnings of $1.2 billion for 2013. The company issued this full financial statement for the fourth quarter and 2013:

UPS released details regarding fourth quarter 2013 results. Diluted earnings per share totaled $1.25, a $0.07 decline from 2012 fourth quarter adjusted results. Average daily package volume increased 6.0%, as total deliveries in December surged 20%. Significantly higher than predicted volume and inclement weather contributed to excess operating costs in the U.S., negatively affecting results.

During the fourth quarter 2012, UPS reported a diluted earnings per share loss of $1.83, due to an after-tax, non-cash charge of $3.0 billion to account for a mark-to-market pension adjustment.

“As the retail market shifts to a direct-to-consumer model, more and more companies are leveraging UPS solutions,” said Scott Davis, UPS chairman and CEO. “As a result, we experienced an unprecedented increase in volume, exceeding even our most optimistic plans.

“The increased volume put a strain on our network, causing delays. In response, UPS deployed additional people and equipment, placing a greater emphasis on service than cost,” Davis explained. “UPS will make the necessary investments and operational improvements to ensure we meet the needs of the marketplace.”

The company expects full-year diluted earnings per share to be within a range of $5.05 to $5.30, an increase of 11%-to-16% over 2013 adjusted results.

UPS delivered 20 million packages per day during the fourth quarter. Total shipments in 2013 increased to 4.3 billion, a 3.9% improvement over 2012.

During the holiday period, global daily deliveries exceeded expectations by surpassing 29 million packages on five days, with peak volume exceeding 31 million on December 23. Also during this period, UPS experienced 10 days with delivery volume that exceeded the company’s previous high.

Cash Flow

For the year ended Dec. 31, UPS generated $5.3 billion in free cash flow, producing a net income-to-cash conversion ratio of more than 120%. The company paid dividends of $2.3 billion, an increase of nearly 9% per share over the prior year, and repurchased more than 43 million shares for approximately $3.8 billion.

U.S. Domestic Package

U.S. Domestic fourth quarter revenue improved 4.2% to $9.3 billion. Daily package volume increased 5.6% with Deferred and Ground leading the way, up 8.0% and 5.8% respectively.

Total revenue per package declined 1.3%, as lower fuel surcharges, changes in product and customer mix, as well as higher service refunds, contributed to the drop.  Shippers continue to utilize the UPS portfolio, choosing lower cost over faster delivery, as evidenced by more than 30% growth in UPS SurePost.

Operating profit totaled $1.2 billion as additional costs associated with a greater-than-expected surge in volume and weather led to a $178 million decline from the prior-year adjusted results. Increased compensation and benefit costs reflected the deployment of additional resources in an attempt to meet service commitments.  During the quarter, UPS exceeded seasonal hiring targets by more than 30,000, deploying a total of 85,000 temporary employees. In addition, the company experienced significantly higher purchased transportation expenses.

On a reported basis, the operating loss for the fourth quarter of 2012 totaled $1.8 billion as a result of the mark-to-market pension charge.

International Package

International revenue increased 5.3% to $3.4 billion on 8.8% growth in daily package volume. UPS Export products rose 9.5% per day, driven primarily by 13% growth in Europe and significant growth in the Asia-to-Europe trade lane. Non-U.S. domestic products were up 8.2% with strong growth in Poland, Italy, and Canada. During December, the segment achieved a peak volume day above four million pieces and exceeded last year’s high on 11 days.

Export yield declined 3.4% on a currency neutral basis, as a result of lower fuel surcharges and customer preference for non-premium products. Double-digit gains in Pan-European shipments also lowered revenue per piece.

Operating profit improved 7.6% to $537 million. Operating margin expanded 30 basis points to 15.9%, compared to last year’s adjusted results.

On a reported basis, the operating loss for the fourth quarter of 2012 totaled $442 million as a result of the mark-to-market pension charge.

Supply Chain & Freight

Revenue in the segment fell 5.8% to $2.3 billion, due to declines in the Freight Forwarding unit. Operating profit was flat compared to 2012 adjusted results, as improvements in Distribution offset declines in Forwarding and UPS Freight.

On a reported basis, the operating loss for the fourth quarter of 2012 was $541 million as a result of the mark-to-market pension charge.

The Forwarding unit experienced a revenue decline resulting from decreased tonnage and revenue per kilo, in International Air Freight. The Ocean Freight business reported growth in shipments and operating margin expansion.

Distribution revenue increased over the prior year period. The retail and healthcare sectors contributed to the improved results. Global footprint expanded during the year to 284 facilities, with more than 22 million square feet of space.

UPS Freight LTL revenue increased 2.3% over the prior year driven by LTL tonnage and pricing improvements.

Outlook

The company announced plans to repurchase $2.7 billion of UPS shares during 2014. Capital expenditures are anticipated to be approximately $2.5 billion. This includes accelerated deployments in operational technologies and over $500 million of increased investments in capacity expansion and hub modernization.

“While the year ended on a challenging note, we are confident in our ability to adapt and we expect much better results in 2014,” said Kurt Kuehn, UPS chief financial officer. “UPS expects balanced profitability growth across all segments in a slightly better economic environment, resulting in full-year guidance of diluted earnings per share of $5.05 to $5.30, an 11%-to-16% increase over our 2013 adjusted results.”

Copyright Photo: Keith Burton/AirlinersGallery.com. Boeing 757-24A (PF) N416UP (msn 23903) prepares to arrive in Las Vegas.

UPS Airlines: AG Slide Show

Bloomberg visits UPS’ sorting hub at UPS Worldport, Louisville, Kentucky:

UPS-We Love Logistics logo

 

UPS’ Airbus A300F4-622R N155UP crashes on approach to Birmingham, Alabama

UPS Airlines’ (UPS-United Parcel Service) (Atlanta and Louisville) Airbus A300F4-622R N155UP (msn 841) crashed this morning while on approach from the north to Birmingham-Shuttlesworth International Airport, Birmingham, Alabama. The crew was operating cargo flight 5X 1354 from the Louisville hub to Birmingham. There were some showers in the area at the time of the accident. The two crew members were tragically killed in the crash.

The crash scene at Birmingham (NTSB):

UPS A300-600F N155UP Crash Birmingham (NTSB)

NTSB Final Briefing:

Bottom Copyright Photo: Ken Petersen/AirlinersGallery.com. N155UP is pictured on the cargo ramp at New York’s John F. Kennedy International Airport before the tragic accident.

UPS Airlines: AG Slide Show