UPS vs. FedEx: Which Logistics Giant Looks Like the Better Long-Term Play?​

Group 1: Market Overview - UPS and FedEx are major logistics companies facilitating global commerce, with McKinsey projecting 7%-9% annual growth for the e-commerce industry through 2040, indicating sustained demand for both companies [1]. Group 2: Performance Comparison - FedEx has outperformed UPS both year-to-date and over the past five years, with a year-over-year revenue growth of 6.8%, while UPS experienced a 3.3% decline in its latest quarters [2]. - UPS has a higher valuation with a PEG ratio of 1.85 compared to FedEx's 1.41, suggesting FedEx is slightly cheaper based on expected growth [5]. Group 3: Strategic Approaches - FedEx is focusing on growth by spinning off its freight segment to prioritize ground and air shipments, as stated by CEO Raj Subramaniam [3]. - UPS is currently shrinking its operations to enhance profit margins, as indicated by CEO Carol Tomé, who emphasized strengthening revenue quality [4]. Group 4: Employment and Operational Changes - UPS plans to lay off 30,000 workers this year due to reduced Amazon shipments, which is expected to lead to continued revenue dips in upcoming quarters [6]. - In contrast, FedEx has retained more of its workforce, with recent layoffs totaling 1,350 workers, which is significantly lower than UPS's planned layoffs [7].