United Parcel Service, Inc. (NYSE:UPS) is headquartered at Sandy Springs, Georgia, and is in the business of global package delivery, bringing about fifteen million packages to more than six million clients around the globe. Known for its brown trucks that mimic its brown paper packages, it operates its own airline that flies out of its Louisville, Kentucky hub.
The company was founded as the American Messenger Company in Seattle by James Casey, who later merged with other entrepreneurs to become the Merchants Parcel Delivery by 1913. At this time, the company introduced consolidated delivery, and thus was born United Parcel Service. Over the years, the look and service of the company has not changed, yet its reach and breadth now spans the globe. In 1999, UPS became a publicly traded company, and in its first move the company acquired Mail Boxes Etc, a global retail chain of business service centers, and Menlo Worldwide Logistics, a global supply chain company with operations in 20 countries worldwide, covering third party logistics and supply chain management.
The Industry Nemesis
Forever intertwined with United Parcel Service, Inc. (NYSE:UPS) is its major competitor FedEx Corporation (NYSE:FDX). FedEx is another US company in the global package delivery service and has been in constant competition for this market. One of the major moves of FedEx is to organize what it termed as the ‘Brown Bailout.’
The issue was the inclusion of a provision to the Federal Aviation Administration Reauthorization Act of 2009 that changed conditions of union rights for employees of FedEx. The dispute was the classification of non-airline personnel of FedEx coverage not under this law but either in the National Labor Relations Act or the Railway Labor Act. UPS’s very own non-airline workers were covered by the NLRA, while the RLA covered the airline employees, and UPS drivers, handlers, and clerks were members of the International Brotherhood of Teamsters. FedEx claims that the change in statute coverage would be giving UPS a bailout, since the new law would require FedEx to unionize nationally, while UPS employees can unionize locally.
Standing in the Stock Market
After reaching its lowest levels in the first quarter of 2009, UPS' shares are currently trading between $82.27 and $83.14, with a 52 week high of $84.11 and EPS of $0.80. It has recently declared an annual dividend of $2.48 per share and its P/E ratio is pegged at $104.50. The company has forecasted earnings for 2013 at 10.64%, nearly double the industry average.
It is in these numbers UPS shows its robust operational base and its capacity towards expansion. As the forecasted earnings clearly indicate, its current expansion into transportation and logistics is the right way to go for true delivery from UPS.