Worldwide lockdowns and social distancing due to the sudden coronavirus outbreak have been responsible for increasing the demand for online shopping, naturally boosting the workload for delivery companies. Therefore, the continually growing number of online orders has created perfect conditions for logistics giants to thrive, leading to the record-breaking year of 2020.
Data analysed by the Trackr app team reveals that in spite of the challenging economic environment, four leading logistics companies – UPS, DHL, USPS, and FedEx – report over $300 billion in revenue for the financial year 2020. The data was analysed from official press releases from 4 selected companies to find out what impact the coronavirus outbreak and e-commerce boom have made on the logistics sector, and provide an outlook for 2021 and beyond.
Logistics companies outperform their earnings guidance
From the data, UPS reports the highest revenue increase of 14.20%, resulting in $84.60% billion. DHL’s revenue reaches a staggering $80.41 billion, followed by USPS that has also experienced a boost of nearly $2 billion (from $71.15B in 2019 to $73.10B in revenue), leaving FedEx with $69.20 billion behind.
As the companies’ leaders admit themselves, 2020 has exceeded their expectations, bringing significant changes to the stock market as well. FedEx managed to improve its stock price to all-time highs of $254.36 for the period of February 10, 2020, to February 10, 2021, increasing its ROI by 60.35%. UPS grew by 53.25% during the same period and its stock price is now $162.37 while DHL experienced 36.04% growth, resulting in a stock price of $45.25.
However, the companies had to also overcome the challenges brought by the pandemic and the surge in e-commerce. The most common issues highlighted by industry leaders were disruptions in the workforce, fast changes in the marketplace, the urgent need for supplements for safety precautions.
Even so, USPS states that the package volume has increased by almost 1.2 billion pieces, or 18.8% compared to 2019, which reflects a clear shift in consumer behavior.
Although the future is still unclear, companies project a positive outlook for 2021 and beyond. DHL and UPS, in particular, have been actively participating in the distribution of COVID-19 vaccines worldwide, aside from their daily activities, reveals data from Trackr.
Ernestas Petkevicius, Co-Founder of the Trackr app says, “As more and more logistics-related tasks are shifting online, one of the biggest challenges in the next 10 years will be the expansion of logistic centers and their ability to adapt”.
“We have already witnessed leading carriers reporting record-breaking numbers, and this is likely the direction that e-commerce-related sectors will continue to follow while having to deal with constantly arising new challenges.”~Ernestas Petkevicius, Co-Founder of the Trackr app
This thought is already well supported by the current shortages of warehouses in Europe, reaching record-low vacancy rates of around 5%. Real estate consultancy Savills reports that the investment volumes for distribution warehouses have already increased by 121% on the long-term average, reaching $6.47 billion.
On the flip side, logistics professionals provide a positive future outlook. As online shopping continues to keep people safer yet closer to their everyday habits during these unprecedented times, carriers evaluate their capabilities positively and expect to benefit from the ongoing e-commerce growth.
Since UPS’s financial performance exceeded its expectations last year, the company expects to continue on the same path while DHL Group forecasts EBIT to further grow not only during this financial year but also to be even higher in 2022.
With inputs from: Trackr