Leading freight carrier United Parcel Service, Inc. (UPS - Analyst Report) announced an investment of $50 million for the construction of nine additional liquefied natural gas fueling stations. The company had already announced construction of four such fueling stations in Apr 2013. UPS expects these fueling stations to begin operations within 2014.
UPS’ investments in building infrastructure for LNG would facilitate 1,000 UPS LNG tractors replacing 24 million gallons of diesel fuel per annum. As a result, the company expects to gain from the prevailing price of natural gas and improve its cost structure going forward.
Further, to enhance growth of its alternative vehicle fleet, management aims to buy nearly 700 liquefied natural gas (LNG) vehicles by 2014 end. Further, the company also introduced UPS Worldwide Express Freight, which offers day-definite, door-to-door freight shipment in key markets. The new service is expected to boost revenues for premium businesses in airfreight.
The company is also seeking growth through Ocean networks by expanding the UPS Preferred LCL (Less-Than-Container-Load) service to key markets in Europe. We believe the introduction of products and services adds opportunities for revenue generation.
UPS has undertaken a number of initiatives to improve its performance level. The company launched a new shipment monitoring and risk management solution – UPS Proactive Response Secure. The new service – that is available throughout the U.S. and Puerto Rico, and to outbound ships from the U.S. to the European Union and Switzerland – will make sure that time and temperature sensitive products reach their destined places.
Additionally, UPS announced the expansion of UPS Worldwide Expedited service to cover more than 220 countries from the current 145 destinations. UPS Worldwide Expedited includes air service for international shipments and provides delivery within two-to-five working days. This would facilitate UPS’ customers with cost effective freight solutions across continents. The company expects its international segment to register revenue and daily volume growth of 4% to 5%.
UPS, which operates with the likes of FedEx Corp. (FDX - Analyst Report), Expeditors International of Washington Inc. (EXPD - Analyst Report) and Radiant Logistics, Inc. (RLGT - Snapshot Report), retains a Zacks Rank #3 (Hold).