Rob Salmon's questions to United Parcel Service Inc (UPS) leadership • Q2 2025
Question
Rob Salmon of Wells Fargo requested more color on how international package margins trended during Q2 amid the significant decline in the China-U.S. trade lane and asked for expectations for the third quarter.
Answer
CFO Brian Dykes credited the international team's agility, noting over 100 ad-hoc flight adjustments were made in Q2 to manage the shifting trade flows. He acknowledged this created some 'frictional costs' and projected Q3 international margins would be similar to Q2's. He expects margins to improve as tariff situations stabilize, allowing for more permanent capacity adjustments. CEO Carol Tomé added that margins were also impacted by lower demand-related surcharges, a headwind that the company will lap in Q4.