Due to many Americans staying home during the COVID-19 pandemic to reduce the risk of spreading the virus, the e-commerce industry has seen an uptick in business. According to CNBC, FedEx and UPS have seen their best quarter in decades, and traders are expected to back them.

How well have FedEx and UPS done in Q3?

FedEx closed on Q3 80% higher than they have in the last three months. That’s FedEx’s best quarterly gain since 1998. But FedEx isn’t the only one to have seen success. UPS closed on Q3 50% higher than they have in the last three months. That’s UPS’ best quarterly gain since the company initially went public back in 1999.

FedEx and UPS expect to further power gains

According to the portfolio manager at Federated Hermes, Steve Chiavarone, both FedEx and UPS are expected to further their power gains in the transport sector. By the final quarter of 2020, the two may see even greater success. Chiavarone says transport is one of the few industries that have been able to keep their heads above water during the COVID-19 crisis and that success may carry into the post-COVID economy. Ari Wald, the head of technical analysis at Oppenheimer, agrees that the economy is giving transportation a boost and road-and-rail industrial stocks are expected to stay strong.

How to make the transport titans’ success work for you

Every second, approximately 2,760 packages are shipped. With e-commerce booming during the pandemic, that number may be even higher. It’s no surprise, then, that FedEx and UPS have been experiencing serious success. However, it’s important not to let that success go to your head when it comes to parcel contract optimization.

That is, just because a carrier is doing well doesn’t mean they won’t try to squeeze a little money from you by incorporating carrier GSR waivers into your contract or changing their shipping rates. To help protect your business’ shipping budget, you need a professional parcel contract optimization team on your side to go over your contract and make sure you’re not being taken advantage of. That’s where AFMS comes in. To learn more about parcel contract optimization and how our team can help you with parcel contract negotiation to improve your relationship with your carriers, contact AFMS today.

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