The latest industry updates paint a varied picture of the supply chain and the various aspects of modern shipping and transportation markets. This report highlights some of the hottest topics making headlines in transportation spend optimization and supply chain logistics, including rising fuel costs, the continued focus on sustainability, and growing concerns in the healthcare field.
According its latest earnings release, UPS reported consolidated revenues of $24.4B, a 6.4% increase from 2021. Additionally, consolidated operating profits topped $3.3B, nearly 17.6% higher than last year and 12.1% based on an adjusted basis. These and other trends remain on track based on predictions and actionable insights made in the previous year, further affirmed by an increase in targeted share repurchases of $2B for 2022 alone.
UPS saw a fall of more than 3% YoY in its parcel volume as commercial delivery growth was not enough to make up for the drop in residential parcel orders. This drop equates to 611,000 fewer packages daily, a more significant decrease than predicted for parcel shipping. Despite the volume decline, UPS saw a nearly 10% increase in per-package profits as the company followed its strategy of pursuing more profitable deliveries.
Industries across the board continue to face disruptions in global supply chains. Shippers are particularly alarmed over significant declines in rail service. According to Supply Chain Dive, they urged regulators during an emergency meeting earlier this week to take action to address the issues. Long delays, rising prices, and labor constraints threaten to shutter some operations, which would only exacerbate supply chain headaches and delays. A resolution still has yet to be reached.
According to the Department of Energy's Energy Information Administration (EIA), retail gasoline prices have risen an estimated 26%. And as high of a jump as that is, diesel is up a staggering 42.8% based on current freight data reports. While it would be easy to blame the increases on the Russia-Ukraine war, given Russia's significant role in diesel supply, the bulk of the responsibility lies elsewhere. The reality is that the price of diesel compared to crude and gasoline has been on the rise long before the current conflict, which is only further speeding up the increase in fuel costs overall.
ESG – environmental, social, and governance – principles remain a major influencer over FedEx's sustainability initiative. Its focus on sustainability in logistics has been a focal point of the company's reporting since efforts began 14 years ago. At the start of 2022, the company's leaders reported that they remain steadfast in their beliefs and strategic approaches to making a more sustainable future. The latest FedEx ESG report covers progress and performance on ESG topics in their 2021 fiscal year, which ended May 31, 2021.
The healthcare and medical markets are struggling with mounting pressure and ongoing obstacles within supply chain operations. It has become abundantly clear that a healthcare facility must modernize its services in supply chain management (SCM) practices to manage supply and demand and adjust to changes in availability and shipping timelines.
According to PRNewswire, research and studies over the past few years have shown that standardized and united processes save time and money. By standardizing their practices, hospitals can save as much as 17% overall. Thus, modern SCM solutions and machine learning processes need to be employed by healthcare institutions and encouraged at every opportunity to maximize profits and provide efficient support when and where it is needed the most.
These latest developments in the supply chain are certain not to be the final say in what happens throughout the rest of quarter two of 2022. Today's shippers need an upper hand and expert help to navigate the chaos, and Intelligent Audit can be that voice of reason. Connect with Intelligent Audit to get started and stay both strategic and informed now.
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