Shipping Profits Explode 💰

SHIPPING NEWS

Shipping Lines Cash In During Global Disruptions

More shipping lines have released financial reports for the 2024 calendar year — and it’s clear that despite global turmoil, they’ve made bank. Driven by higher freight rates and rerouted voyages due to Red Sea tensions, many carriers posted strong profits after a volatile 2023.

Collectively, the major shipping lines that have reported their financial figures for 2024 have recorded a combined full-year earnings before interest and taxes (EBIT) of $27.3 billion. However, this figure does not include companies like MSC (which is privately held) and PIL (which rarely publishes financial reports). Sea-Intelligence estimates that the total industry profitability at the EBIT level for 2024 is around $60 billion, highlighting how rerouted voyages and capacity tightening worked in carriers’ favor.

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TRADE NEWS

United Parcel Service to cut 20,000 Jobs

United Parcel Service (UPS) is laying off approximately 20,000 workers and closing 73 facilities in a sweeping restructuring move. The layoffs, which will affect both management and contract roles, are expected to be completed by mid-2025. The company projects $3.5 billion in annual cost savings, despite incurring $400–$600 million in severance and shutdown-related expenses.

This dramatic shift is part of UPS’s strategy to reduce reliance on Amazon, its largest but least profitable customer. The company plans to cut Amazon volumes by more than 50% by late 2026. UPS is focusing on improving margins and reshaping its network around smaller, more profitable customers.

CEO Carol Tomé cited an “uncertain macroeconomic environment” as a key driver behind the decision, noting weakened demand from small businesses and broader economic headwinds. The restructuring comes just ahead of a new 145% tariff on Chinese imports, adding more pressure to global supply chains.

While first-quarter revenue dipped slightly by 0.7%, UPS saw a 3.3% year-over-year increase in operating profit. However, it has not updated its full-year guidance, signaling caution ahead.

The Teamsters union, representing many UPS workers, expressed concern over the cuts, especially given a contractual obligation to create 30,000 new union jobs. UPS has said it will still meet this target, positioning the layoffs as a move toward automation and long-term sustainability.

This shake-up signals how global logistics giants are being forced to adapt rapidly amid shifting customer dynamics and economic uncertainty.

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