Revenue for the Supply Chain and Freight segment
rose 0.8 percent in 2015. Currency exchange rate
changes and lower fuel surcharges contributed to
about a 450-basis point drag on revenue growth.
Initiatives to improve account profitability in
Forwarding and UPS Freight resulted in lower
revenues, yet higher profits. The segment also
suffered from slowing in the U.S. Less-Than-
Truckload, International Air Freight and Truckload
Brokerage markets. These industries remain highly
dependent on industrial manufacturing growth,
which was muted in 2015.
While revenue growth was challenged in 2015,
profitability continued to improve. In fact, adjusted
operating profit* increased 8.1 percent and the
operating margin* expanded 60 basis points,
to 8.2 percent.
Our industry-specific focus in the Distribution
business continues to provide revenue growth
opportunities in our small-package and freight
operations. UPS now manages 7 million square
feet of dedicated healthcare distribution space in
51 multi-client facilities around the globe.