United Parcel Service Inc (UPS.N) reported a 23% rise in quarterly profit on Tuesday, bolstered by high e-commerce demand that has allowed the delivery firm to raise shipping prices and cherry-pick more profitable customers.
UPS and rival FedEx Corp (FDX.N) are delivering record number of e-commerce packages since COVID-19 shifted shopping online.
Both have added profit-sheltering surcharges to offset the higher cost associated with home deliveries, and now are grappling with the sharply higher cost to hire and retain dependable drivers.
UPS’ third-quarter operating profit rose to about $2.9 billion, or $2.65 per share, from $2.36 billion, or $2.24 per share, it had reported a year earlier.
The company also raised its full-year adjusted operating margin target to about 13% from about 12.7%.