UPS is seeing strong growth in Europe and other markets.
David Abney
David Abney

Having announced positive second-quarter results last week, United Parcel Service Inc.‘s CEO David Abney voiced once again his support for the Trans-Pacific Partnership, the 12 nation free trade agreement still to be approved by the U.S. Congress and participating nations.

No surprise there, Mr. Abney has been a consistent supporter of free trade even in the midst of a presidential campaign where both the Democratic and Republican candidates use it as a whipping boy for the electorate’s concerns about the economy.

During a May address in Boston, Mr. Abney acknowledged that both presidential candidates opposed the pact despite the traditional support of both the Democratic and Republican parties for free trade.

TPP is a historic agreement that represents real market opportunities for U.S. companies of all sizes and a chance for them to compete on a more level playing field with local players,” said Mr. Abney during a conference call announcing the second-quarter results.

“We thank Ambassador Michael Froman, Acting Deputy USTR Wendy Cutler, and TPP Chief Negotiator Barbara Weisel for their tireless and genuine efforts to secure the best possible trade deal for American companies, workers, and consumers.”

The 12 participating nations concluded their negotiations in Atlanta in October. According to UPS, the deal represents nearly 40 percent of global GDP from the Americas to Asia and aims to establish the rules of trade for the 21st century encouraging good regulatory practices, promoting transparency, and addressing discriminatory practices between state-owned and state-supported entities that compete with the private sector.

Each day, UPS alone handles six percent of U.S. GDP and two percent of global GDP. TPP will help UPS customers across multiple sectors by bringing down tariffs, accelerating the release of goods through customs, and supporting the participation of small businesses in regional and global supply chains,” Mr. Abney added.

He also said that “UPS looks forward to working with lawmakers in Washington and in their home districts to ensure a full understanding of the many market-opening provisions of this agreement, and to highlight the specific ways American businesses, particularly small- and medium-sized businesses, can capture new export opportunities.

Additionally, UPS is hopeful that after a full review, the U.S. Congress will vote to approve the agreement as soon as possible so that American companies can begin to benefit from the economic growth and jobs that it will spur.”

According to the second-quarter results, International operating profit jumped more than 11 percent to $613 million, setting a record second-quarter level. Volume growth in all products, disciplined pricing and network efficiency gains contributed to the increase in profitability.

Daily packages increased 3.9 percent, as growth out of Europe and Asia offset lower U.S. levels. The Europe-to-U.S. trade lane increased at a double-digit pace, as customers used the UPS network to benefit from the strength of the U.S. dollar. Export shipments increased across all product categories and premium products outpaced non-premium.

UPS Chief Financial Officer Richard Peretz underscored Mr. Abney’s comments by saying that when the U.S. enters into a free-tade agreement with a country, U.S. exports to that country rise by about 20 percent.

He added that one UPS job is supported by every 22 packages that cross a border.

The company earned $1.23 billion in the quarter, up 3.2 percent from the same period a year earlier.