UPS, FedEx Shipping Decline Signals No Significant Rebound From Recession

[Purveyor]

April 22 (Bloomberg) -- Falling shipments at United Parcel Service Inc. and FedEx Corp., which together deliver 80 percent of packages in the U.S., show the economy is in a recession and unlikely to rebound this year.

UPS, whose domestic volume has outperformed the gross domestic product for almost a century until last year, said April 8 that deliveries dropped in the first quarter. UPS also said earnings for the three months through March will miss its previous projection by as much as 7.4 percent, just the third time the Atlanta-based company has made a new forecast that was below an earlier one.

FedEx's U.S. shipments dropped 2 percent last quarter, and the company said last month it would have ``limited earnings growth'' this year because of the slowing economy. Both companies are also struggling with soaring jet-fuel, gasoline and diesel costs after crude oil surged 80 percent in the past year.

``This is what a recession feels like,'' said Steven Marco, who manages $800 million including UPS shares at Marco Investment Management LLC in Atlanta. ``The trucks are not as full as they used to be.''

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UPS and FedEx's customers include Ford Motor Co., Dell Inc., and Amazon.com Inc., as well as banks and law firms. That gives them exposure to almost all industries, making them ``coincident indicators'' of economic health, says Rajeev Dhawan, director of the economic forecasting center at Georgia State University in Atlanta.

Drops in U.S. shipments, coupled with job losses and tighter bank lending standards, signal that the economy probably entered a recession in November or December, and may have a period of no growth for 9 or 10 months, Dhawan said.


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http://www.bloomberg.com/apps/news?pid=20601109&sid=aFS4NPtPEFhw&refer=home

[suston96]

1. Yah, but - the stock market is doing fine......that's what counts, eh? nt

[Mika]

2. What can Brown do for you? Ship your job to China. Overnight.

[notesdev]

3. Anyone expecting a rebound is foolish

This will be years long. Get serious and save your money, people.