UPS has launched a transformation plan designed to boost cash flows by $1 billion over the next five years through a mixture of rationalization, automation, new services and a focus on higher growth markets. That follows a decline in profitability (EBITDA margin) for eight straight quarters after a slide to 15% in 2Q from 17% a year earlier, which track a fall for the freight forwarder sector overall.

The twin aims of better profitability and growth may not be compatible. A 9% decline in U.S.-inbound volumes in the three months to August 31 vs. a sector average increase of 5% indicates profitability is winning for now. The widening trade war between China and the U.S. will be a challenge – 58% of UPS’s maritime inbound volumes to the U.S. came from China in the past 12 months.