Margin Outlook
Q: What drives the expected profit increase into Q4 and impact on 2025?
A: The profit increase from Q3 to Q4 is driven by a focus on revenue quality, pricing initiatives, and acceleration of Fit to Serve and Network of the Future productivity programs. We expect the domestic margin to be around 9.5% in '24 and to exit the year slightly higher than the 10% previously guided. We'll provide more details on 2025 after peak season. "

Revenue Per Piece Trends
Q: How are domestic revenue per piece trends progressing?
A: Domestic revenue per piece showed positive momentum from Q2 to Q3, with base rate impact improving from 90 basis points to 170 basis points. We expect revenue per piece to turn positive in Q4, driven by pricing actions enabled by our pricing architecture of tomorrow and adjustments like modifiers. "

Cost Improvements and Initiatives
Q: How are cost initiatives impacting per-piece costs, and what's the outlook?
A: Third-quarter cost performance was outstanding, with wage inflation decreasing from 12% in Q2 to 5.2% in Q3. We’ve accelerated Fit to Serve and Network of the Future initiatives, closing facilities and improving productivity. In Q4, we expect cost per piece to increase about 1%, still less than revenue per piece growth, maintaining a positive spread. "

USPS Contract Impact
Q: How is the USPS onboarding affecting operations and profitability?
A: The USPS volume is now fully onboarded after initial mismatches in Q3. We're seeing positive performance, with resources aligned as planned. We absorbed over 50 million cubic feet into our network in Q3, and the fourth quarter will reflect all volume being integrated. "

Pricing Environment
Q: Are you experiencing increased price competition in the market?
A: While the industry is price competitive, we see rational pricing. We focus on winning through service and capabilities like RFID, leading to growth in enterprise and SMB commercial volumes. These capabilities help drive revenue per piece growth despite competition. "

Largest Customer Volume Decline
Q: How is the glide down with your largest customer affecting volumes?
A: Our largest customer continues to reduce air volume with us, contributing to a 6.5% decline in air volume in Q3, entirely attributable to them. They are trading down from air to ground and shifting some volume to their own network, creating opportunities for us elsewhere. "

Capacity Adjustments
Q: Do you see excess capacity, and how are you adjusting resources?
A: We've proactively reduced capacity by closing 45 operational facilities, removing about 1 million packages per day from the market. We continue to adjust resources to match demand, adding for peak season but aligning overall capacity with the current environment. "

Peak Season Hiring
Q: Why increase peak hiring despite softer volume expectations?
A: We're hiring 125,000 seasonal employees this year, up from 100,000 last year, as our average daily volume will be positive. We hire based on need and have the flexibility to adjust quickly. We're also increasing helper teams with drivers by about 10% to optimize delivery during peak. "

Negotiations with USPS
Q: What's the status of the USPS delivery service agreement negotiations?
A: We're working to finalize a mutually agreeable contract with USPS, moving quickly and hoping to conclude soon. We'll share more details during our fourth-quarter earnings call. " "

International Business Performance
Q: How is international business performing amid macro weakness?
A: Despite softer macro indicators, our international business expanded revenue, profit, and margin, posting an 8% margin. We've held cost per piece flat, delivering operating leverage, and plan to continue these strategies into next year. "