Market Overview

United Parcel Service Widens The Scope Of Its Express Service


In a customer-friendly move, United Parcel Service, Inc. UPS has broadened the reach of its UPS WorldWide Express Service. Following the expansion, the service can be availed in 124 countries and territories across the globe. The measure aims to facilitate the delivery of urgent shipments in markets offering high-growth potential.

In fact, UPS seems to be constantly expanding the scope of this service as it is highly favored by companies for global shipments that are time-sensitive by nature. Depending on the destination, customers availing of this service are guaranteed delivery within 1-3 business days by 10:30 a.m., noon, or 2 p.m.

Last year, the UPS Express Service was added to 7,000 postal codes in 57 countries and territories, including the likes of India, Brazil and North Korea.

European Union Sued by UPS Over TNT Acquisition Blockade

Apart from the above expansionary measure, UPS was in the news when it reportedly sued the European Union to the tune of approximately 1.7 billion euros ($2.1 billion) plus interest and taxes. UPS is asking for the amount to compensate it for wrongly blocking its attempts to take over Dutch delivery firm TNT Express. We remind the investors that UPS' efforts to acquire TNT Express were thwarted by European regulators in 2013.

The regulators had blocked deal citing UPS' massive European presence. They were of the opinion that the materialization of the deal  would lead to limited competition in the European delivery market.

In the previous year, an EU court had stated that it was wrong on the part of European Commission to block the deal from materializing, per a Reuters report. In fact, UPS' decision to sue the EU was natural after the submission by the EU court. Following UPS' failure to close the deal, rival FedEx Corporation FDX acquired TNT Express in 2016, for approximately €4.4 billion, thereby boosting its European presence.

Now with UPS seeking compensation from the EU over blocking its attempts to buy TNT express, we expect investor focus to remain on this burning issue. Additionally, in the event of UPS eventually receiving the hefty amount claimed, its already strong balance sheet is expected to be strengthened further.

UPS' sound financial position can be made out from the fact that its board of directors cleared an approximately 10% hike in its quarterly dividend to 91 cents per share ($3.64 annually) on Feb 8. Apart from UPS, other transportation companies like Norfolk Southern Corporation NSC and Canadian National Railway CNI have raised their dividend payouts recently.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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