UPS reported a great Q4 with record growth, volume and profits.

Highlights:

• Best peak in company history.

• Revenue up 21% y/y in Q4 ($24.9B)

• Profit grew 26% y/y in Q4

• Revenue $84.B in 2021

The most interesting part of this for me is the biggest growth drivers around their SMB customers.

• Volume grew 28.5%, outpacing larger customers

• Accounted for 64% of average US daily volume growth

The big question is, are these Amazon marketplace parcels or Shopify parcels. They don't have this kind of visibility.

The Amazon mix would tell you the # of parcels that would be at risk to an Amazon market entry. I expect it's more than 50% of this volume. Perhaps as much as 75% as Amazon sellers flee USPS in a flight to quality UPS services.

Interesting is that B2B is off:

• High-tech and retail reduced.

• Healthcare and auto improved.

I thought the B2B retail note was interesting, that is tied to brick and mortar replenishment.

Another interesting point is that while UPS has concluded that Freight is low-margin (the sale of UPS freight division will close in Q2 2021), and low quality revenue, while Amazon is entering the market.