UPS just posted record-breaking profits, plans to hike prices in 2022

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Courtesy: David Paul Morris/Bloomberg/Getty Images

(CNN) — UPS just posted its best year ever -- and 2021 isn't even over yet. Next year could be even better for UPS, because it's hiking its rates substantially in 2022.

In the midst of gridlocked supply chains and inflation woes, UPS continues to benefit from the increase in online shopping as the Covid-19 pandemic persists.

During the first 9 months of 2021, "UPS has generated more operating profit than any full year in our history," UPS CEO Carol Tomé said on a post-earnings call with investors and analysts Tuesday. The company's operating profit rose to $2.9 billion in the third quarter, up 22.6% from last year. In 2021, UPS has earned $8.9 billion in operating income, up 58% from the same period of 2020.

The company's record-breaking third-quarter earnings beat analysts expectations, sending shares up more than 7% Tuesday morning.

UPS' total revenue hit $23.2 billion in the third quarter that ended September 30, up 9.2% from the same period last year and easily surpassing Wall Street's expectations. Sales from US operations, the shipper's largest market, jumped 7.4%.

Typically, the fourth quarter, which includes the holiday shopping and shipping season, is the busiest and most lucrative for UPS.

Service changes

Consumer prices are rising at the fastest 12-month pace since 2008, and supply chain bottlenecks plus a labor shortage are only putting more pressure on costs. UPS announced an annual rate increase of 5.9% for 2022 during Tuesday's call. That's higher than last year's increase of 4.9%.

UPS also confirmed its US weekend service will be expanded by the end of this week as expected. The company will now provide Saturday service to about 90% of US markets for both residential and commercial pickups and deliveries, Tomé said.

Earlier this month, UPS was among the major companies that met with President Joe Biden to try to find solutions for the ongoing supply chain crisis impacting retailers and shippers. The company committed to 24/7 operations to move more products during off-peak hours.

Additionally, in September UPS shared that it would hire more than 100,000 seasonal workers "to support the anticipated annual increase in package volume" during the holiday season, according to a company press release. That is roughly the same number of seasonal workers the shipper added last year.

UPS' commitment to expanded service comes as a staggering $24 billion in goods sits on barges and container ships outside the Ports of Los Angeles and Long Beach waiting to be unloaded.

This story was first published on CNN.com, "UPS just posted record-breaking profits, plans to hike prices in 2022."