Overnight delivery services like UPS and FedEx have become proxies for the U.S. economy. UPS alone counts 6% of the U.S. GDP in its system at any given moment, according to TheStreet.com's Ted Reed, who recently rode along with a veteran driver to get a feel for the economy in Charlotte, N.C. Like many of its customers, UPS has been stung by the recession, reporting a 10% decline in net income for the third quarter. FedEx, meanwhile, slashed its 2009 earnings outlook based on "significantly weaker macroeconomic conditions." And DHL, once seen as a serious competitor, has largely pulled out of the U.S. market, leaving some 9,500 employees without jobs.
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