Member Exclusive   //   February 1, 2024

Research Briefing: UPS announces layoffs and its effect on fulfillment

By Li Lu

In this edition of the weekly briefing, we examine UPS’s recent layoffs and the state of fulfillment as seen in data from Modern Retail+ Research.

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UPS layoffs could impact retailer shipping strategies 

Breaking News: UPS announced that it will be laying off about 12,000 jobs as it has reported a year-over-year revenue decline. 2023 was filled with economic turmoil and, as a result, UPS and its other competitors have increased prices. In January, the United States Postal Service raised its average general shipping rate by 5.5%, including a 6.4% increase in USPS Retail Ground prices. Meanwhile, both UPS and FedEx also increased their average rates by 6.9% this year. The Wall Street Journal reported recently that retailers have raised the threshold of the minimum purchase price for free deliveries in an effort to combat this issue. 

Questions: With all the changes happening to the shipping industry, how will this affect product fulfillment? Will layoffs delay shipping? What other strains are happening in the supply chain?

Answers From Research: 

In a July 2022 Modern Retail survey, nearly two-thirds (63%) of respondents said they were investing in new technologies and capabilities to combat supply chain delays. Those supply chain concerns reached a peak for some companies in late 2022 during the holiday shopping season, a time of year many retailers rely on to make the bulk of their revenue.

Evan Moskal, co-founder of Courant, a wireless charging brand specializing in home and office tech accessories, said it takes the company’s team all year to plan for the onslaught of holiday sales, especially amid supply chain strains during the past couple of years.

Want to learn more: Modern Retail+ Research’s fulfillment strategy analysis examines the direction that retail is headed.


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