Question · Q3 2025
Ken Hoexster inquired about the drivers behind the anticipated 300 basis point sequential improvement in domestic margins for Q4, the potential for accelerating cost-cutting benefits into 2026, and UPS's initial thoughts on the upcoming Supreme Court hearings regarding tariffs and a potential reversal of the de minimis exemption.
Answer
Brian Dykes, CFO, attributed the sequential margin improvement to an expected peak volume surge, strong holiday demand surcharges, and enhanced network efficiency from 42 new automation projects and reconfiguration, reducing reliance on variable capacity. Carol Tomé, CEO, stated that UPS would closely monitor the Supreme Court hearings on tariffs but could not speculate on the outcome.