Business Operations - In Q1 2025, the company entered an agreement to reduce delivery volume for its largest customer by over 50% by June 2026, shifting focus to higher yielding volume [20][55]. - The company serves over 200 countries and territories, with a significant presence in major global economies, enhancing operational efficiency [22]. - The company delivered approximately 16 million ground packages per day, most within one to three business days, showcasing its extensive logistics capabilities [40]. - In 2024, the company served 1.6 million shipping customers and over 10.1 million delivery recipients daily, indicating strong customer engagement [55]. - The company completed the divestiture of its truckload brokerage business, Coyote, in September 2024, streamlining its operations [39]. - The company has approximately 490,000 employees globally, with 406,000 in the U.S., emphasizing its large workforce [46]. - The company is investing in cold chain logistics capabilities, including acquisitions of Frigo-Trans and Biotech & Pharma Logistics in January 2025, to enhance healthcare service offerings [42]. - The company expects to reduce its operational and management workforce as part of its U.S. network reconfiguration and Efficiency Reimagined initiatives [48]. - The company has begun delivering 100% of its SurePost volume as of January 2025, following changes in the USPS operating model [65]. Financial Performance - The company incurred impairment charges of $125 million for goodwill and $111 million for indefinite-lived intangible assets during the year ended December 31, 2023, due to changes in business strategy and challenging macroeconomic conditions [122]. - The company maintains a strong credit rating to provide flexibility in pursuing strategic growth opportunities, including technology investments and acquisitions [27]. - Employee health and pension benefit costs represent a significant expense, with recent increases in healthcare costs exceeding inflation rates [119]. - The company is exposed to changes in interest rates, which impact short-term debt and the valuation of pension obligations [116]. Regulatory Compliance - The company is subject to various regulatory requirements, including compliance with TSA regulations for air cargo transportation and DOT regulations for ground operations [62][64]. - The company participates in the Civil Reserve Air Fleet program, allowing the U.S. Department of Defense to requisition specified aircraft for military use, with compensation for such use [63]. - The company is subject to evolving laws and regulations regarding privacy and data protection, including the European Union General Data Protection Regulation [75]. - The company has agreed to pay a civil penalty as part of a settlement with the SEC regarding alleged violations related to impairment analyses [125]. Environmental and Climate Regulations - The company maintains numerous environmental compliance programs to address responsibilities and minimize waste within operations [71]. - Increasingly stringent regulations related to climate change could materially increase operating costs for the company [126]. - The ReFuelEU Aviation initiative mandates a target percentage of sustainable aviation fuel (SAF) starting at 2% in 2025 and increasing to 70% by 2050, potentially raising operating costs significantly [128]. - Compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) may begin mandatory participation in 2027, which could also increase operating costs [128]. - The potential withdrawal of the U.S. from the Paris Climate Accords may create uncertainty regarding future GHG emissions policies and regulations [129]. - Increased regulation on GHG emissions could lead to higher fuel costs and capital costs for updating or replacing aircraft or vehicles [130]. - The company may face significant fines or penalties for non-compliance with GHG emissions disclosure regulations, which could adversely affect operations [132]. Legal Risks - The nature of the business exposes the company to various claims and lawsuits that could result in significant expenditures and materially affect operations [133].
UPS(UPS) - 2024 Q4 - Annual Report