United Parcel (UPS) Offering Possible 22.55% Return Over the Next 28 Calendar Days

United Parcel's most recent trend suggests a bullish bias. One trading opportunity on United Parcel is a Bull Put Spread using a strike $155.00 short put and a strike $145.00 long put offers a potential 22.55% return on risk over the next 28 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $155.00 by expiration. The full premium credit of $1.84 would be kept by the premium seller. The risk of $8.16 would be incurred if the stock dropped below the $145.00 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for United Parcel is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for United Parcel is bullish.

The RSI indicator is above 80 which suggests that the stock is in overbought territory.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

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LATEST NEWS for United Parcel

Xos Trucks Raises $20 million For Electric Chassis
Wed, 19 Aug 2020 15:34:14 +0000
Electric mobility startupXos Trucks Inc. raised $20 million to keep up with orders for its modular chassis. The money is helping meet demand for underpinning medium-duty regional and last-mile delivery trucks with its X-Platform.Investors included Proeza Ventures, a Mexican mobility-focused venture capital firm backed by the holding company of auto supplier Metalsa. BUILD Capital Group also participated. FreightWaves reported the capital raise in June. But Xos only revealed the amount Tuesday. Metalsa helped Xos design the X-Platform. It is providing components to the chassis as part of the investment.  Xos has test trucks operating in the Los Angeles area with United Parcel Service, Inc. (NYSE: UPS) and Loomis Armored trucks. It plans to further scale the production of its X-Platform that underpins the UPS and Loomis vehicles."It's our goal to provide reliable, affordable and sustainable transportation as the volume of e-commerce demands are increasing, and have accelerated during the pandemic," said Xos co-founder and CEO Dakota Semler.Rodolfo Elias Dieck of Proeza Ventures and Mark Lampert of BUILD Capital Group will join the Xos Board of Directors."We've been impressed with what the Xos team has been able to achieve in such a short amount of time and with limited funding," said Dieck, Proeza managing director. "They have designed and engineered a proprietary, reliable and affordable battery pack and skateboard solution for commercial fleets."Co-founder and Chief Operating Officer Giordano Sordoni said the investment is critical to scaling the business to meet demand for new orders coming in monthly. Xos uses Fitzgerald Glider Kits as its contract manufacturer. Related articles: Xos electric truck startup edging toward low-volume productionThor Trucks, now Xos, ordered to relinquish Thor nameCommercial vehicles charge toward an electric futureClick for more FreightWaves articles by Alan Adler.See more from Benzinga * FedEx's Peak Surcharges Go In Different Direction Than UPS * US, China Reciprocate On More Airline Access * Q&A: COVID, The Rise Of China, And The Future Of Ocean Shipping(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

FedEx's Peak Surcharges Go In Different Direction Than UPS
Wed, 19 Aug 2020 15:32:10 +0000
FedEx Corporation (NYSE: FDX) disclosed its upcoming peak shipping season surcharges on Tuesday, and tweaked its surcharge language in an effort to set it apart from its chief rival, United Parcel Service Inc. (NYSE: UPS).The FedEx surcharges will apply to customers that shipped more than 35,000 packages via FedEx Express and FedEx Ground in any week covering two separate periods: Oct. 5-18 and Nov. 16-29. The first FedEx surcharge will apply between Nov. 2 and Dec. 13 for the volumes shipped during the October period. The second levy applies between Dec. 14 and Jan. 17 for volumes shipped during the mid-November cycle.The amount of the surcharges will depend on how much a FedEx customer shipped between Feb. 3 and March 1, the last period of normal volumes before government lockdowns to stop the spread of the novel coronavirus closed off all buying channels except for e-commerce. Under the FedEx program, a $1 surcharge will apply to each ground parcel delivery if total volumes exceed 110% of weekly traffic tendered from Feb. 3 through March 1. The surcharges will rise in $1-per-parcel increments until topping out at $4 per parcel for volumes that exceed 500% of the February traffic.For FedEx Express, the company's air and ground unit, the surcharges will start at $2 per parcel, and escalate by $1 per parcel up to the 500% threshold. The FedEx surcharges will apply to commercial and residential deliveries, whereas the UPS surcharge applies just to residential deliveries. For example, a FedEx shipper tendering 25,000 weekly packages during the week for commercial delivery and 10,000 packages for residential delivery will be slapped with a surcharge on the residential portion.In another departure from UPS' surcharge policies, every parcel handled under FedEx's SmartPost service, where FedEx inducts bulk volume parcels deep into the U.S. Postal Service's (USPS) network for residential deliveries, will be assessed a surcharge. By contrast, UPS' peak levies will apply to 25,000 parcels moving weekly on a combined basis by air, ground and its SurePost service, which is UPS' version of its partnership with USPS. The amount of the SmartPost surcharge will depend on the peak period when a SmartPost shipment is tendered.  For example, a parcel tendered between Nov. 2 — the start of the FedEx peak — and Nov. 29 will be assessed a $1 surcharge. The surcharge will increase to $2 between Nov. 30 and Dec. 6 before reverting to $2 between Dec. 7 and Jan. 17, the end date for the peak cycle.John Haber, CEO of Spend Management Experts, a consultancy, said UPS is likely to establish a separate surcharge on SurePost deliveries after USPS on Friday announced its peak-season levies on large-volume users like UPS.Haber said the SmartPost policies are designed to wean FedEx shippers off the service and compel them instead to use the company's Home Delivery product, where costs are higher but so are potential margins. FedEx is migrating all of its SmartPost traffic in-house with the exception of sparsely populated destinations, where it will continue to use USPS.Peak season surcharges for 2020 have become very complex and expensive as the parcel supply chain braces for the typical holiday delivery deluge while coping with unprecedented volume spikes due to the impact of the virus. E-commerce volumes are expected to remain quite elevated into the peak as more consumers decide to order online rather than visit a store during the holidays.As with UPS, FedEx will impose stiff surcharges on shipments whose atypical size and dimensions make it difficult and expensive to handle. FedEx will impose a $52.50-per-package surcharge on oversized packages, a $4.90 fee for shipments that require "additional handling," and a $350-per-package fee for "unauthorized" ground deliveries. The latter is a rarely seen fee for shipments that should be moved through the company's less-than-truckload (LTL) network, but need to be handled — at significant time and expense — by the package operation. Another difference between the two this year is that some of the extraordinary UPS charges don't kick in unless certain volume thresholds are met. By contrast, the FedEx surcharges are levied on every shipment.See more from Benzinga * US, China Reciprocate On More Airline Access * Q&A: COVID, The Rise Of China, And The Future Of Ocean Shipping * Daimler Trucks North America Building At Pre-Pandemic Levels(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Amazon Makes It Harder for Sellers to Avoid Shipping Service
Wed, 19 Aug 2020 01:12:00 +0000
(Bloomberg) — Amazon.com Inc. plans to make it harder for merchants to ship products themselves, meaning they’ll be more likely to pay the company to handle the task.New shipping performance requirements, announced in an email to merchants Tuesday, will require third-party sellers to make deliveries on Saturdays and meet new one- and two-day delivery pledges starting in February. If the merchants fail to meet the targets, they risk losing a coveted Prime fast-shipping badge that influences which products shoppers buy.Amazon said the changes are necessary because sellers’ deliveries are often late, while merchants say they worry they’ll be forced to pay for Amazon logistics without a chance to shop around.The move has potential antitrust implications because merchants could be forced to raise product prices if using Amazon logistics costs more than paying United Parcel Service Inc., FedEx Corp. or the U.S. Postal Service.Amazon introduced Seller Fulfilled Prime five years ago to help expand the number of products shipped quickly by letting some merchants handle the delivery themselves. The aim was to ease bottlenecks in Amazon warehouses since products would go directly from sellers to Prime subscribers, who pay monthly or yearly fees for delivery discounts and other perks — and typically spend more than other Amazon shoppers.Now Amazon says the program’s performance is abysmal and is raising standards as part of an effort to reduce delivery times for many products from two days to one. Before the Covid-19 outbreak, fewer than 16% of Amazon orders shipped through Seller Fulfilled Prime in the U.S. met a two-day delivery promise, largely because participants couldn’t make weekend deliveries, Amazon said.“Amazon is making significant investments in our fulfillment and transportation capabilities to make Prime faster, transitioning from a Two-Day to a One-Day delivery program,” the email said. “As we continue to improve the Amazon Prime experience for customers, we want to ensure Seller Fulfilled Prime meets customers’ expectations of Prime.”By raising performance metrics that Amazon itself adjudicates, the company will entice more merchants to pay Amazon for logistics rather than competing services, said Shaoul Sussman, a legal fellow at the Institute for Local Self-Reliance, a frequent Amazon critic.“Amazon is holding these sellers to a very high standard that Amazon itself doesn’t even follow,” he said. “It looks like the decision is to kill this program. The way to kill it is with very high cost of operating and forcing those who want to do their own delivery into Fulfillment By Amazon.”In a letter to federal lawmakers last year, an online merchant accused Amazon of forcing him and other sellers to use the company’s expensive logistics services, which in turn forces them to raise prices for consumers. The letter also accused Amazon of “tying” its marketplace and logistics services together, a potential antitrust violation in which a company uses dominance in one market to give itself an advantage in another market where it’s less established.Sellers said that delivering products on their own was potentially less expensive than Amazon’s services. But most used Fulfillment By Amazon anyway to avoid being punished for performance issues and because doing so meant their products had more visibility on the site. In the letter, the merchant said Amazon had raised its fees by 20% over the preceding four years until they were 35% more than competing services. Amazon disputed the allegations.“As we move toward One Day Delivery, we are making changes to Seller Fulfilled Prime to provide customers with fast, consistent delivery, regardless of the fulfillment method,” an Amazon spokeswoman said. “We are informing selling partners now so they have time to adjust their business and have set up a dedicated support team to guide them through these adjustments and help them succeed.”Amazon has been developing its own delivery operation for years to reduce its reliance on UPS, FedEx and USPS for the critical ”final mile” to a customer’s home. Providing logistics services to merchants is a fast-growing revenue source for Amazon. Third-party seller services, which includes logistics, generated sales of $18.2 billion in the second quarter, up 52% from a year earlier and far more than the $10.8 billion from its profitable cloud-computing division Amazon Web Services.That growth has strained Amazon facilities and pushed it to experiment with different programs meant to expand capacity. Another experimental program called FBA Onsite, which let Amazon’s merchant partners take Amazon inventory into their own warehouses and oversee its packaging and delivery, will be closed in February, Amazon told sellers Tuesday. The end of that program, which Amazon also attributed to poor delivery performance, will likely push more packages through Amazon’s logistics network.Amazon has to keep reducing delivery times because it faces competition from big rivals such as Walmart Inc. that are investing in making same-day deliveries from thousands of stores around the country, said Neil Saunders, a retail analyst at GlobalData in New York.“Anything that’s a monopoly doesn’t have to respond to competitive conditions in this manner,” Saunders said. “Amazon is working overtime to make sure it meets delivery promises and improves the experience because customers have more choices about where they can shop online.”(Updates with details about the end of Amazon warehouse program in 14th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Amazon Postal Deal That Trump Despises Is Actually Profitable
Tue, 18 Aug 2020 21:52:51 +0000
(Bloomberg) — President Donald Trump has frequently assailed the pricing agreement between Amazon.com Inc. and the U.S. Postal Service. Yet the deal has repeatedly been described as a money-maker for the beleaguered agency.Trump — who faces accusations from Democrats that funding cuts and operational changes at the post office are meant to stop mailed votes for Democratic challenger Joe Biden from being counted — claimed in an interview with Fox News on Monday that Amazon is “maybe the biggest problem with the post office” because of the losses that the service takes on package deliveries.And in Yuma, Arizona, on Tuesday, he said Amazon should pay higher prices for shipping packages to cover the Postal Service’s costs. “Amazon is going to pay for the post office,” Trump said. “It’s part of their model. They think the post office is stupid.”The USPS has been losing billions of dollars a year for more than a decade as people use email and other online services to correspond, in addition to its onerous pension obligations. But its commercial package delivery service, which includes agreements with companies such as Amazon, FedEx Corp. and United Parcel Service Inc., is lucrative, the post office and lawmakers have said.Terms of the Postal Service’s delivery deal with Amazon are confidential, however USPS has repeatedly said it doesn’t lose money on the agreement. In addition, the post office must cover its costs in its commercial package delivery business under the law. Amazon regularly uses the postal service to complete what’s called the “last mile” of delivery.In fact, shipping and packages have been the only growth segment for the Postal Service and jumped more than 50% to $8.3 billion in revenue in the third quarter, which ended June 30, according to fiscal 2020 results released Aug. 7. Every other service category fell in both revenue and volume, in part because of the coronavirus pandemic. The pandemic drove up costs, including for personal protective equipment and paid sick leave, contributing to a net loss of $2.2 billion in the period, roughly in line with the year before.Trump claimed in the Fox interview, without showing evidence, that the Postal Service loses about $3 per package with Amazon. He had previously claimed the loss was $1.50.“They take a lot of this mail into areas where they could never go because the postal system is massive,” he said. Amazon is dropping “packages into the post office by the thousands.”Spokespeople for USPS and Amazon didn’t comment on Trump’s allegations. They have previously called the deal a success.Back in 2018, when Trump repeatedly blamed the deal for the post office’s woes, two top Democratic lawmakers who said they reviewed the deal with Amazon, declared that retailers shipping packages represented a rare bright spot for the Postal Service.The agreement with Amazon and other retailers has been “one of the few areas of growth in Postal Service revenues, experiencing double-digit increases in recent years and accounting for nearly 30% of its operating revenue in fiscal year 2017,” according to a letter led by the late Representative Elijah Cummings of Maryland in June 2018. Cummings and fellow Democrat Gerald Connolly of Virginia called Trump’s charges related to the post office “inaccurate” and said the Amazon deal is comparable to other last-mile arrangements.Trump has long aimed insults at Amazon and its chief executive officer, Jeff Bezos, who owns the Washington Post, which has closely covered his administration’s foibles.The issue has resurfaced as Trump-appointed Postmaster General Louis DeJoy initiated service cutbacks and and the service warned 46 states that it might not be able to deliver their ballots on time for the November election. But amid a growing outcry over the changes, DeJoy announced Tuesday that he would suspend them until after the election.DeJoy is scheduled to testify before a Senate panel on Friday and a House panel on Monday.Even as the ongoing Covid-19 pandemic prompts states to step-up mail-in voting procedures, Trump, who’s trailing Biden in polls, has claimed without evidence that it routinely leads to massive fraud, raising concerns about attempted voter suppression.Speaker Nancy Pelosi is calling the House back from the summer recess to try to address the cuts.(Updates with Trump comment, DeJoy announcement, starting in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

USPS' Holiday Surcharges May Be Lump Of Coal For Merchants
Mon, 17 Aug 2020 21:15:29 +0000
The first-rate increase of the Louis DeJoy era as postmaster general could end up hitting millions of merchants right between the eyes during the busiest time of the year. However, the increases could be stocking stuffers for the agency's largest parcel users. With no fanfare — and subsumed by the extraordinary election-year chaos swirling around the U.S. Postal Service (USPS) — the agency on Friday afternoon announced a series of proposed peak holiday season surcharges on its biggest parcel customers, those who ship massive numbers of packages under commercial contracts with USPS. In absolute terms, the increases are measured in cents on the dollar. However, because of the very low rates already afforded to big users, they amount to substantial increases on a percentage basis.The proposed temporary hikes, which would take effect Oct. 18 and run until Dec. 27, must still be approved by the Postal Regulatory Commission, the independent agency that oversees USPS' pricing actions. The increases will not affect retail customers and do not apply to international shipments, USPS said. It will also not be accompanied by any structural changes in the agency's parcel-processing and delivery operations. Under the proposed measure, a 1-pound parcel rate for the agency's popular Parcel Select DDU drop-shipping service, where consolidators dump bulk parcels deep into the postal network for residential deliveries, would rise by as much as 7.5%, from $3.19 to $3.43 per parcel. The rate for a returned parcel of the same weight would rise 7.9%. The rate of a parcel weighing less than 1 pound would jump by 13.3%. Commercial rates on USPS' Priority Mail two- to three-day delivery product would rise 5.9% from a low of $7.02 to $7.42 per piece. The surcharges would average out to 6% to 8% increases on USPS' largest mail users, according to estimates from investment bank UBS.However, those increases will likely be passed on, and in larger increments, to the small to midsize merchants who pay the large users to consolidate their parcels with millions of others and induct them in bulk deep into the postal system for residential deliveries. According to UBS estimates, the marked-up surcharges by United Parcel Service, Inc. (NYSE: UPS), which operates as a consolidator of merchant traffic, could be two to four times higher than the increases that UPS will absorb from USPS. In a note published Sunday, UBS called the nature of the USPS announcement "unusual," and said it reflects the tightness of the parcel delivery market as well as the greater-than-normal pricing power currently held by UPS, rival FedEx Corporation (NYSE: FDX) and USPS on business-to-consumer (B2C) traffic.Some National Service Agreements (NSA), the name for contracts between USPS and its largest shippers, have caps on rate increases. However, NSAs allow for rate pass-throughs as a result of USPS pricing actions beyond the users' control, according to Jerry Hempstead who runs a parcel consultancy bearing his name. Carriers have levied, or are poised to levy, their own peak surcharges, which are expected to be larger than prior years due to the added volumes associated with the coronavirus pandemic. In an email, Hempstead said many shippers will "most likely get a double whammy of the carriers' peak surcharge and the USPS peak surcharge."Consultancy Shipware, LLC used the example of the Parcel Select rate increase to illustrate the potential financial benefit to consolidators like UPS. The $3.19 rate paid by UPS will rise by 24 cents per parcel. However, should UPS pass on that increase proportionately, the $10.17 rate that it charges customers using its SurePost last-mile induction service will rise by 76 cents per parcel, Shipware said. The differential represents a 52 cent, or 5.1%, increase for UPS on every SurePost shipment, Shipware said. Shipware CEO Rob Martinez said the gap will create a "huge profit" opportunity for UPS. Conversely, merchants operating on tight margins and already offering consumers low-cost to free shipping in order to compete could find the markups painful, Martinez said.The Package Coalition, which represents a broad array of USPS stakeholders, said in a statement that the proposed increases are "relatively moderate" compared to the frequent calls by President Donald Trump for USPS to quadruple its parcel rates. Trump's demands, which many experts believe would severely damage smaller merchants and cause postal customers to flee to rivals, are "devastating to businesses and consumers," said John McHugh, the coalition's president. Forcing USPS to "set prices above competitive levels would do nothing but harm the Postal Service and, with it, the American businesses and consumers who rely on its delivery services," McHugh said.The USPS increases will apply to all businesses who drop-ship parcels at the agency's "destination delivery unit," postal lingo for the local post office. These include companies like UPS, FedEx, DHL and Pitney Bowes Inc. (NYSE: PBI), as well as mega-shippers like Amazon.com Inc., (NASDAQ: AMZN), USPS' largest shipping customer, that have the large volumes to meet the agency's thresholds for receiving bulk commercial ratesThe proposed surcharges will help offset the costs of handling elevated parcel volumes since the coronavirus pandemic began, and will generate additional revenue at a critical time, the agency said in a statement on Friday.USPS handled 701 million shipments in July, a 46% year-on-year increase, according to data from consultancy ShipMatrix. Second-quarter volumes rose nearly 50% year-on-year to 2.1 billion parcels, ShipMatrix said.USPS handles immense residential volume. It delivered 6.2 billion parcels in 2019, more residential volume than FedEx and UPS combined, according to Shipware data. Most of the volume came from the Parcel Select service, Shipware said.Parcel Select is popular with consolidators and merchants because it offers universal deliveries at very low rates. By law, USPS must serve every address in the U.S. Big users value Parcel Select because it provides them with blanket delivery coverage without the cost of dispatching their trucks and drivers.See more from Benzinga * TFI Raises 9 Million In Share Offering * JD.com Buys 2 Million Majority Stake In Express Delivery Giant * Alphabet-Backed Startup To Build Self-Driving 'Road Of The Future'(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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