BYLINE: Robert Moorman
A slowing American economy, high fuel prices, too much capacity and slackening demand may collectively account for why UPS''s first quarter results and FedEx''s fiscal third-quarter earnings were relatively flat, particularly in the domestic business.
"The first quarter of 2007 has turned out to be a bust" for UPS and much of the air freight business, said Ned Laird, president of the Seattle-based Air Cargo Management Group. "There is no growth in the domestic market and virtually no growth in the to-and-from U.S. markets."
But the reports also suggest UPS and FedEx are riding out what some believe are fundamental changes in their domestic businesses by spreading into other areas, including growing international air business, that is keeping them solidly profitable.
"Both companies are doing extremely well in a very difficult environment," said Lee Clair, a partner with Norbridge, management consultants for the transportation industry. "They are also well positioned against a slowing economy because of international businesses."
Atlanta-based UPS'' first quarter net profit dropped 13.5 percent to $843 million compared to $975 million the company earned in the first three months of 2006 and came on a 3.3 percent gain in revenue, to $11.9 billion.
Overall domestic package volume slipped 0.2 percent, with ground parcel business …