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UPS passes FedEx for the best spot

UPS passes FedEx for the best spot

Cconsumers are making more online purchases than ever. For the haulage companies that make sure all these goods get where they need to be, it’s been a very profitable shift.

For Atlanta-based shipping giant, UPS, a surge in e-commerce sales helped it reach number 100 this year. Forbes Global 2000, our annual ranking of the world’s largest companies based on a composite of sales, profits, assets and market value. That’s the best of all transportation companies, and it takes the top spot in the industry from rival FedEx, which checks in at number 162 this year.

UPS — which Amazon claims as its largest customer — posted annual revenues of $97.2 billion in 2021, up from $84.6 billion in 2020. And it made a profit of $12.8 billion, up from $7. .7 billion. Those numbers reflect a broader rise in the e-commerce market. Online shoppers spent more than $870 billion in the US last year, according to government data, up 10% from 2020 and 44% from 2019, when the total was just $600 billion.

But the growth rate has slowed back to pre-pandemic levels. While the e-commerce market grew by 32% in 2020, it grew by 14% in 2021. And there are other potential stressors on the horizon. If inflation continues, consumer spending could fall, which could take a bite out of shipping.

“We’re clearly not going to see the kind of growth we’ve seen during COVID,” CEO Carol Tome said during the company’s first quarter earnings call. UPS reported a 7.4% decline in retail deliveries compared to the first quarter of 2021. “But e-commerce sales will continue to grow.”

The same increase in online sales and shipping traffic that helped UPS also fueled a record year for AP Moller-Maersk, which lands at number 159 on this year’s list. The Dutch shipping giant posted $61.8 billion in revenue in 2021, up 55% from the previous year. Earnings growth was also explosive, skyrocketing to $18 billion in 2021 from $2.9 billion in 2020.

Until now, 2022 was even better. For the first quarter of the year, Maersk reported revenue of $19.3 billion and profit of $6.8 billion.

“Honestly, we see tremendous growth potential in logistics over the next decade,” CEO Soren Skou said during the company’s latest earnings call.

Another shipping giant, Evergreen Marine, made the biggest jump of all shipping companies, landing at number 494 on this year’s list, after being ranked number 1,287 last year. Perhaps best known as the operator of Ever Given, the container ship that caused an international incident in 2021 when it ran aground in the Suez Canal, Evergreen posted a profit of $9.5 billion in 2021, compared to $1.3 billion. a year earlier.

At number 243, Chinese rival COSCO Shipping is another notable climber on this year’s list, rising from number 409.

Checking in at No. 323, the biggest debutante on this year’s list is Daimler Truck, which manufactures trucks, buses and other heavy-duty vehicles and vehicle parts. It emerged from Daimler – now known as Mercedes-Benz Group – through an IPO in December.

The bottom line for transportation companies: Rising demand and supply chain bottlenecks are driving sales and profits up. This is reflected by a remarkable increase in the number of places in the Forbes Global 2000 that are occupied by companies from outer space. A total of 70 transport companies have made the decision, compared to 48 last year.