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Today’s Logistics Report: Parceling Out Profits; Amazon’s Shipping Prime; Flipping Reverse Logistics

United Parcel Service Inc.’s close work with Amazon.com Inc. is paying off for the package carrier. The package carrier’s shipping volume and operating profit jumped sharply in the fourth quarter, the WSJ’s Paul Ziobro reports, as UPS gets cozier than ever with the largest online retailer in the U.S. while rival FedEx Corp. focuses on retailers competing with the e-commerce behemoth. UPS Chief Executive David Abney says Amazon now makes up 11.6% of the company’s annual revenue, but that other major retailers all are shipping more with the carrier. The company’s pricier air express services grew at a double-digit pace during 2019, including a 25.9% year-over-year gain in next-day air shipments in the fourth quarter. FedEx’s overnight air shipments have declined in three of the past four quarters and SJ Consulting says UPS now holds a bigger share of the next-day market than its Memphis-based rival.

Excerpt from WSJ
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Airlines Shouldn’t Always Listen to Their Customers

The financial results of European budget leader Ryanair suggest there is more bark than bite in complaints about unbundled air fares.  “Just raise my ticket price instead of loading me up with extra charges, and I’ll pay.” Evidence from the airline industry suggests this is something people say but don’t do.

The trend of “unbundling”—dividing a product up into different payable segments—has picked up pace again among carriers. It was pioneered by the likes of Southwest and European budget leader Ryanair, RYAAY +5.93% but full-service brands like Delta Air Lines, United Airlines and British Airways eventually followed suit with “basic economy” fares. Now, Lufthansa and Emirates—which focuses more than most on the luxury market—are testing the waters of unbundling in business class.

Excerpt from WSJ
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Major Boeing Supplier to Lay Off 2,800 Workers

Freeze on Boeing 737 MAX forces Spirit AeroSystems to cut back

The biggest Boeing Co. BA -0.76% 737 MAX supplier said it is planning an initial 2,800 layoffs, the first announced job cuts since the grounding of a plane that is rippling through the broader aerospace industry.

Spirit AeroSystems Holdings Inc. SPR -1.59% makes the fuselage and engine parts for the MAX and had been producing enough for 52 jets a month before Boeing said it would freeze assembling the planes in January for a “temporary” time.

As the largest U.S. manufacturing exporter and one of the nation’s top private employers, Chicago-based Boeing plays a big role across the industry and in the U.S. economy.

Production of the MAX, which was Boeing’s best-selling plane, supported thousands of jobs across a network of over 600 suppliers and hundreds of other smaller firms in the global MAX supply chain.

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OPINION - Boeing Emails Explain Nothing

OPINION

Where were the acerbic, scathing employees when MCAS was designed?

A Boeing 737 MAX in Renton, Wash., Dec. 16, 2019. PHOTO: LINDSEY WASSON/REUTERS
The latest crop of Boeing emails is a torment to the company in its struggle to get the 737 MAX into the air, but a secret that should not be a secret is that all of corporate America, not just Boeing, lives these days by employing creative, freethinking people who spout off acerbically, critically and colorfully in electronic messages.

Think of the Sony emails leaked by presumed North Korean hackers. My own corporate overlords in the media business have lived in this world longer than most. When a General Mills executive was hired to cut costs at the Los Angeles Times in 1995, the newsroom immediately dubbed him the “cereal killer.” The executive was philosophical. After all, his new company employed too many sardonic, highly verbal people to expect anything else.

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