Not too long ago, Steven Hayward noted that FedEx was showing the effects of economic drought. Now, he’s not just seeing red, white, blue, green and red. He’s seeing brown, by way of the Wall Street Journal:
United Parcel Service reported tepid growth for the second quarter and reduced its profit forecast for the full year, saying customer confidence has been rattled by the European debt crisis and the U.S. “fiscal cliff” looming early next year.
A government can do many things to hide signs of economic decline. China has is probably the leader in that field, and has been for many years. The problem is that it is hard to hide economic facts from the people who put the connection in commerce.
If UPS and FedEx are both saying that their business is dropping off enough to delay or scrub plans for new equipment and new people, then we are hurting. Neither of these companies is USPS, which regularly loses a few billion every quarter. No, these are companies which have perfected, as far as human systems go, the art of moving goods around the world.