UPS profit beats as pandemic drives healthcare, e-commerce shipments

(Reuters) – United Parcel Service Inc <UPS.N> exceeded analyst estimates for profit and revenue on Thursday as lucrative healthcare and air shipments helped offset a margin squeeze from surging e-commerce home deliveries, sending shares up 11.5%.

The novel coronavirus pandemic is driving more shipments in everything from face masks and medical equipment to food and furniture.

UPS is raising prices, containing costs and investing in projects to speed up service as it manages economic uncertainty – particularly in the United States, where COVID-19 deaths are spiking, unemployment benefits could shrink, and a presidential election looms in November.

“The fact that margins compressed so little on 65% growth in residential deliveries is encouraging. The company did much better than (Wall) Street was expecting adjusting the network to more residential demand,” Bernstein analyst David Vernon said.

UPS shares jumped 10.6% to $136.82 in early trading. The stock is up roughly 6% this year, outperforming the 9% decline in the Dow Jones Transports index <.DJI>.

The report was the first from UPS Chief Executive Carol Tomé, who took the helm at the world’s biggest package delivery firm on June 1. She is the first outsider to lead UPS in its more than 100-year history.

Average daily volumes in the United States jumped 22.8% to 21.1 million daily packages during the second quarter.

That came at a cost, since dropping packages on doorsteps is less lucrative than delivering to businesses as it requires more truck miles and stops per route. Inc <AMZN.O>, its largest customer, drove much of that growth.

UPS also grabbed more air cargo from Asia, in part due to rival FedEx Corp’s <FDX.N> split with Amazon last summer. Rates for air cargo were sky-high in the second quarter.

Atlanta-based UPS said net income rose 4.9% to $1.77 billion in the quarter. Excluding items, it earned $2.13 per share, beating estimates of $1.07 per share.

Revenue grew 13.4% to $20.46 billion, beating estimates for $17.48 billion, according to IBES data from Refinitiv.

(Reporting by Sanjana Shivdas in Bengaluru and Lisa Baertlein in Los Angeles; Editing by Amy Caren Daniel and Bernadette Baum)

Gunman in California UPS shooting targeted co-workers for slayings

A police patrol car blocks a street outside a United Parcel Service (UPS) facility after a shooting incident was reported in San Francisco, California, U.S. June 14, 2017. REUTERS/Stephen Lam

By Steve Gorman

(Reuters) – The UPS employee who shot three coworkers to death last week inside a United Parcel Service facility in San Francisco before killing himself appears to have singled out his victims deliberately, but a motive remains unknown, police said on Friday.

Investigators have yet to examine the contents of computers, cell phones and a journal seized from the gunman’s home in their search for clues to the June 14 attack, San Francisco Police Commander Greg McEachern said at a news conference.

McEachern also revealed the murder weapon was a MasterPiece Arms “assault-type pistol” that he said was “commonly known as a MAC-10,” equipped with an extended 30-round magazine. He said such weapons are outlawed in California.

That gun and a second, semiautomatic pistol recovered from the scene were both listed as stolen weapons – the MAC-10 from Utah and the other handgun in California, McEachern said.

Police offered few new details about how the shooting itself unfolded.

The gunman, Jimmy Lam, 38, was attending a morning briefing with fellow employees at the UPS package-sorting and delivery center in San Francisco when he pulled out a gun and “without warning or saying anything” opened fire on four co-workers, the police commander said.

The first two victims, identified as Wayne Chan, 56, and Benson Louie, 50, were killed.

In the ensuing pandemonium, Lam walked calmly outside the building, approached another co-worker, Michael Lefiti, 46, and shot him dead without uttering a word, then reentered the facility.

Moments later, as police closed in, Lam put a gun to his head and pulled the trigger, McEachern said, adding that Lam fired about 20 rounds in all before the bloodshed ended. Police never fired a shot.

While no motive has been established, McEachern said interviews of various witnesses have led investigators to believe that the three slayings were “purposeful and targeted,” based on actions observed that day.

He said surveillance video also showed that during the rampage, Lam appeared to pass by other co-workers “without there being any interactions,” suggesting those he did shoot were intentionally singled out.

It was less clear whether the two surviving gunshot victims were deliberately targeted, he said.

News of the carnage in San Francisco was largely overshadowed that day by an unrelated shooting hours earlier in the Virginia suburbs of Washington that left a congressman and several others wounded before police killed the assailant.

(Reporting by Steve Gorman in Los Angeles; Editing by Bill Rigby)

UPS worker kills three colleagues in San Francisco, turns gun on himself

Police officers gather outside a United Parcel Service (UPS) facility after a shooting incident was reported in San Francisco, California, U.S. June 14, 2017. REUTERS/Stephen Lam

By Emmett Berg

SAN FRANCISCO (Reuters) – A UPS driver opened fire with a handgun inside a United Parcel Service Inc <UPS.N> delivery center in San Francisco on Wednesday, killing three co-workers before fatally shooting himself as police closed in, authorities and company officials said.

Two people wounded by gunfire were taken to a hospital. Five other people suffered less serious injuries in a frantic exit from the building, San Francisco police said.

The gunshot victims, like the killer, all were UPS drivers, and the attack unfolded as the workers gathered for their daily morning meeting before starting their delivery rounds, said Steve Gaut, head of investor relations at UPS.

Authorities did not immediately identify the suspect or the victims.

Assistant San Francisco Police Chief Toney Chaplin said the gunman shot himself in the head as he was confronted by officers swarming the building. The police never fired a shot.

Authorities offered no possible motive for the violence and Chaplin said at a news conference it was not an act of terrorism.

Police said they recovered two firearms, including the murder weapon, which they described as an assault pistol.

The UPS facility, a package-sorting and delivery hub that serves the greater San Francisco area and employs about 350 workers in the city’s Potrero Hill area, was placed under a security lockdown for six hours.

“We are always saddened by the loss of life to gun violence,” San Francisco Mayor Ed Lee said on Twitter. “Any shooting is one shooting too many.”

The UPS shooting erupted hours after an unrelated mass shooting at a baseball practice session in the Virginia suburbs of the nation’s capital left a congressman and several others wounded before the assailant was killed by police.

Former congresswoman and gun-safety advocate Gabrielle Giffords, who was gravely wounded in a 2011 assassination attempt in Arizona that claimed six lives, issued a statement lamenting the shootings in Virginia and California, calling them “a stark indication of the scope of gun violence epidemic we face as Americans.”

UPS is providing trauma and grief counseling to employees at the San Francisco center.

Video footage from the scene showed a massive police presence near the facility, with workers being escorted outside and embracing one another on the sidewalk. One worker was found by police hiding inside the sprawling building after the shooting, unaware that the violence was over.

“It was a frightful scene,” Chaplin said.

The San Francisco bloodshed came three years after a UPS employee shot and killed two of his supervisors before turning the gun on himself at a UPS distribution center in Birmingham, Alabama. That gunman had recently been fired from the facility.

The deadliest mass shooting in modern U.S. history occurred in June 2016 when a gunman claiming allegiance to the Islamic State militant group killed 49 people at the Pulse nightclub in Orlando, Florida.

Gun laws in the United States rank among the most permissive of any developed country, with the right to “keep and bear arms” enshrined in the Constitution’s Second Amendment. Efforts to tighten national gun control measures failed after mass shootings at an elementary school in Newtown, Connecticut, in 2012 and the nightclub shooting in Orlando.

(Additional reporting by Alex Dobuzinskis in Los Angeles, Patrick Enright in Seattle and Nick Carey in Detroit; Writing by Jon Herskovitz and Steve Gorman; Editing by Lisa Shumaker and Bill Trott)

At least four killed in San Francisco UPS facility shooting: TV news

Police officers gather outside a United Parcel Service (UPS) facility after a shooting incident was reported in San Francisco, California, U.S. June 14, 2017. REUTERS/Stephen Lam

(Reuters) – At least four people were killed, including the suspected gunman, when a disgruntled United Parcel Service Inc <UPS.N> employee opened fire at a company facility in San Francisco, two local TV news stations reported.

After firing on co-workers, the suspect turned a gun on himself when confronted by police, according to NBC Bay Area and ABC 7. He later died at an area hospital, they said, citing law enforcement sources.

San Francisco police said the building was secure but offered no immediate information on victims.

Live video showed a massive police presence near the facility that employs 350, with employees being led out and embracing each other on the sidewalk outside.

“UPS confirms there was an incident involving employees within the company’s facility in San Francisco earlier this morning,” the company said in a statement.

“Local law enforcement have control of the facility and are conducting an investigation. We cannot provide information as to the identity of persons involved at this time, pending the police investigation,” the statement said.

Victims were taken to the Priscilla Chan and Mark Zuckerberg San Francisco General Hospital, spokesman Brent Andrew said. He said he could not say how many patients were taken to the hospital or give their conditions.

United Parcel Service vans are seen parked outside a UPS facility after a shooting incident was reported in San Francisco, California, U.S. June 14, 2017. REUTERS/Stephen Lam

United Parcel Service vans are seen parked outside a UPS facility after a shooting incident was reported in San Francisco, California, U.S. June 14, 2017. REUTERS/Stephen Lam

(Reporting by Alex Dobuzinskis in Los Angeles; Writing by Jon Herskovitz; Editing by Tom Brown and Lisa Shumaker)

At least 3 people injured in San Francisco shooting: local media

(Reuters) – At least three people were injured, including the suspected gunman, in a shooting on Wednesday at a United Parcel Service facility in San Francisco, local media reported.

San Francisco police on Twitter confirmed a shooting had taken place and advised people to avoid the area.

The suspect was hospitalized in police custody, local media reported.

Victims were taken to the Priscilla Chan and Mark Zuckerberg San Francisco General Hospital, spokesman Brent Andrew said. He said he could not say how many patients were taken to the hospital or give their conditions.

It was not immediately clear if anyone had died.

The shooting occurred in the area of a United Parcel Service &lt;UPS.N&gt; facility, CBS San Francisco and other local media outlets reported, citing authorities. A San Francisco police representative could not immediately be reached for comment.

(This story has been refiled to correct first paragraph to say United Parcel Service facility … instead of … United Postal Service facility.)

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Chizu Nomiyama and Tom Brown)

UPS air maintenance workers vote 98 percent to authorize strike

United Parcel Service aircraft are loaded with package containers at the UPS Worldport All Points International Hub in Louisville, Kentucky,

By Nick Carey

CHICAGO (Reuters) – Air maintenance workers at United Parcel Service Inc have voted overwhelmingly to authorize a strike against the world’s largest package delivery company as contract talks remained deadlocked over health-care benefits, the workers’ union said on Monday.

Teamsters Local 2727 said 98 percent of those who took part in a mail-in ballot voted to authorize strike action. Eighty percent of the local’s 1,200 members participated in the ballot.

Contract talks have been ongoing for three years. If they remain deadlocked Monday, union representatives say they will begin the process that could lead to a strike within 60 days.

The main sticking point has been healthcare benefits. The Teamsters say UPS is demanding major concessions, including a massive spike in retiree contributions for health-care costs.

“UPS wants huge concessions and our members are not willing to take them,” Local 2727 President Tim Boyle said. “We’re not asking for anything we don’t already have and this demonstrates our members are willing to strike.”The air maintenance staff work at hubs around the United States, with more than one-third in Louisville, Kentucky, which is UPS’ main hub.

A strike could ground UPS’ airplanes, affecting packages shipped by air. While it would not halt all deliveries, it would be a major disruption.

The air maintenance workers are governed by the U.S. Railway Labor Act, which only permits strikes after negotiations and mediation have failed.

If talks remain deadlocked Monday, the Teamsters say they will ask the federal mediator overseeing negotiations to release the union from the bargaining table. If there is no resolution after a 30-day cooling-off period, a board appointed by the president would have to rule on a strike, which would take up to 30 days.

A strike would be highly unlikely during UPS’ crucial holiday peak season this year. But it could go before the presidential board before President Barack Obama leaves office in January.

Kevin Gawlik, an air mechanic for 20 years who works at a UPS air hub in Rockford, Illinois, voted to strike. He said the work is tough and can result in health problems, including hearing loss from working around jet engines.

“That’s why I’m willing to walk out and strike to keep my benefits,” Gawlik, 49, said.

(Editing by Jeffrey Benkoe)

UPS backed Rwandan blood deliveries show drones’ promise

A Zipline delivery drone releases its payload midair during a flight demonstration at an undisclosed location in the San Francisco Bay

By Nick Carey

(Reuters) – International delivery company UPS is backing a start-up using drones in Rwanda to transport life-saving blood supplies and vaccines, underlining the wide potential for the unmanned aircraft and helping bring package delivery by drone to U.S. consumers a step closer.

U.S. companies are keen to use drones to cut delivery times and costs but hurdles range from smoothing communication between the autonomous robots and airplanes in America’s crowded airspace to ensuring battery safety and longevity.

As far back as 2013, online retailer Amazon said it was testing delivery using drones and Alphabet Inc’s Google has promised such a service by 2017. Leading retailer Walmart is also testing drones.

But UPS, Walmart, legal experts and consultants say overcoming U.S. regulatory hurdles and concerns over drone safety will require vast amounts of data from real-time use — with testing in the near-term limited to remote areas of the United States or in other countries.

UPS will provide a grant of $800,000 plus logistical support through the UPS Foundation to a partnership including Gavi, a group providing vaccines to poor countries, and robotics company Zipline International Inc for drone flights in Rwanda starting in August. The drones will deliver blood and vaccines to half the transfusion centers in the country of 11 million people, making deliveries 20 times faster than by land.

“Tens of thousands of hours of flight logged in an environment where it’s much easier” to operate will help make package delivery a reality in the United States, Zipline chief executive Keller Rinaudo told reporters at a presentation late last week.

The Federal Aviation Administration (FAA), which has adopted a step-by-step approach to drones, will soon release finalized rules for small drone use that will most likely limit their use to within the “visual line-of-sight” of an operator or observer.

“If you’re looking for an economically-efficient way to deliver packages, you’d be better off using a bicycle,” said Ryan Calo, an assistant law professor at the University of Washington specializing in robotics.


The hurdles to using drones to deliver packages to consumers include technology, communication, insurance and privacy.

Questions remain about battery life and safety, especially after lithium-ion battery problems resulted in a fire on board a parked Boeing 787 in Boston in 2013.

Safe communication between drones and with airplanes in America’s busy airspace is years away. The National Aeronautics and Space Administration has been working on a drone traffic management system and will pass its research to the FAA in 2019 for further testing.

In the push for autonomous cars and trucks, companies like Google and Daimler have turned to individual states such as Nevada, which has issued licenses for testing on its roads. But the FAA controls all U.S. airspace, so permits on a state-by-state basis will not suffice for drone testing.

“You really do have to make sure the FAA is in the boat and we are really focused on that piece of it more than anything,” said Mark Wallace, UPS’ senior vice president for global engineering. As part of its strategy, UPS has invested in Boston-based drone manufacturer CyPhy Works Inc.

UPS will focus on projects like Rwanda and testing drones in remote U.S. areas in the near-term, he added.

Walmart said last year it plans to test drones for package delivery.

The retailer is “more likely to start with short hops” in rural areas, spokesman Dan Toporek said. “It has to happen a step at a time, which will teach us, and will provide insights to the FAA and the public on ‘this is how it could work.'”

Amazon did not respond to a request for comment. Google referred Reuters to previous statements that the company hopes to operate a delivery service by 2017.

Data from companies like No. 2 U.S. railroad BNSF, owned by Warren Buffett’s Berkshire Hathaway Inc, could also prove valuable, said Logan Campbell, chief executive of drone consulting firm Aerotas. BNSF has an exemption from the FAA to operate drones out of the line of sight along its rail network.

Campbell said while drone manufacturers would like to see the FAA move faster, the “nightmare scenario” would be if a drone crashed into a manned aircraft.

“We have to get this right,” he said. “If we move too fast and there’s an accident, it could ruin the entire industry.”

(Additional reporting by Deborah Todd in San Francisco; editing by Stuart Grudgings.)