This text discusses UPS’s consideration of strategic alternatives for its truckload brokerage business, Coyote Logistics, following a significant impact on its Q4 earnings. CEO Carol Tomé mentioned on an analyst call that the company might sell or make changes to Coyote, citing concerns about the high volatility of the truckload brokerage business.

The decision comes after UPS posted an $84 million impairment charge related to Coyote in its earnings report. Despite UPS acquiring Coyote in 2015 to diversify its services, the company faced challenges, particularly during the COVID-19 pandemic, where Coyote’s revenue dropped from $4 billion to lower levels.

Tomé acknowledged that the business might be more valuable to someone else and mentioned exploring options that include selling the business or retaining it without all the overhead. The acquisition of Coyote was initially seen as a way for UPS to leverage synergies with its trucks, but the business’s cyclical nature became more apparent over time.

The text also notes that within UPS’s Supply Chain Solutions segment, which includes Coyote, revenue dropped by nearly 20% in 2023, contributing significantly to the decline. Despite record levels of operating profit in 2021 and 2022, operating profits for the segment dropped by more than half in 2023 to $834 million.

Additionally, UPS revealed plans to reduce its workforce by 12,000 positions, with 75% of the layoffs occurring in the first half of 2024, as part of its broader strategy to address various challenges affecting its earnings.