Giant shipping company reveals 22 facilities closing nationwide
The trucking, logistics, and shipping sector has battled the Great Freight Recession for about three years with no end in sight.
Most companies have blamed reduced shipping demand, lower freight rates, and rising costs of labor, fuel, and insurance as reasons for declining revenues and profits.
In the most desperate situations, shipping companies have filed for bankruptcy protection or even shut down operations.
Conflicting opinions on trucking
Experts have expressed conflicting opinions on the state of the trucking industry. Some believe the sector is still facing dire conditions, while others believe recovery is on the horizon.
“The U.S. trucking industry continues to face a harsh economic reality: spot rates have failed to keep pace with inflation, squeezing carrier margins and contributing to significant financial pressure on truckers nationwide,” wrote Freightwaves CEO Craig Fuller, as reported by TheStreet's Daniel Kline.
Doug Waggoner, CEO of Echo Global Logistics, however, is predicting improvement in the trucking industry, likely after the first quarter of 2026, he told Logistics Management.
“I think we’re at least in the late stages and maybe starting to come up,” Waggoner said. “But traditionally, January and February are the slowest months of the year.”
Regardless of those conflicting views, shipping companies are implementing restructuring plans to turn around their financial difficulties.
UPS closes dozens of facilities
United Parcel Service has named 22 facilities in 18 states that it plans to close this year, which employ union workers, Supply Chain Dive reported.
UPS Chief Financial Officer Brian Dykes, on a Jan. 27 earnings call, said the company would close 24 facilities in the first half of the year and slash 30,000 jobs.
UPS is decoupling 50% of its business with its largest customer, Amazon, by June because the deliveries are not profitable. It also recently agreed to outsource last-mile delivery to the U.S. Postal Service for certain economy shipments, Freightwaves reported.
Daniel Bordoni, the company's president of global labor relations and deputy general counsel of labor, sent a letter to the Teamsters union on Jan. 30, revealing the 22 facilities using union labor that will close.
The company has not named the locations of the two other facilities among the 24 closings, at last check.
Teamsters file lawsuit against UPS
UPS included the letter in a filing with the U.S. District Court for the District of Massachusetts, which is part of a lawsuit filed by the International Brotherhood of Teamsters against a UPS-proposed $150,000 per driver buyout plan.
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