CLAIM #60224 · United Parcel Service Inc (UPS) · 2024Q1 earnings call · Apr 23, 2024 · due Dec 31, 2024
“The big component, though, full year on a run rate basis, the Fit to Serve program will generate $1.3 billion in savings and we're ramping that up in Q2.”
Brian O. Newman · CFO
In context
“ould walk through what are the key pieces of the 2Q versus 1Q ramp in EBIT. And then I guess the same thing for second half. Obviously, you've got Fit to Serve as a significant cost benefit versus 1Q. But I think just trying to figure out how much of the improvement sequentially is based on volume that you have visibility to and how much would be based on anticipation of improvement in the broader parcel market kind of macro improvement. Thank you. Brian Newman : Hey, Tom, happy to take that. So listen, from a Q1 to Q2 perspective, the shape, if we look at the U.S. we would expect marginal growth from a volume perspective, which relative to past trends, normally, Q1 steps down to Q2 from an absolute volume level. So by maintaining that will be a natural accretion from an EBIT perspective. The big component, though, full year on a run rate basis, the Fit to Serve program will generate $1.3 billion in savings and we're ramping that up in Q2. So that will be a big driver as well as we think about it. And then from a Q1 to the back half of the year, it's the same three components, Fit to Serve. It's the volume lift along with the drivers of RPP and then it's the labor contract lapping, which is the big piece in the back end of the year. Carol Tome : And maybe just a few more comments on RPP since our RPP in the U.S. was flat in the first quarter. We expect RPP growth as we head towards the back half of the year. Why? Well, first of all, fuel prices were a drag on the RPP in the first quarter. The projection for fuel is that is going to increase. We are also announcing a fuel surcharge later today. So those two components of fuel will be a bonus to RPP as we head towards the back half. We also are going to have a pretty picky pe”
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SEC filings for UPS ↗ · Claim quote is verbatim from the 2024Q1 earnings call.