America’s largest trucking company said Tuesday that revenue fell 6% in the first quarter compared to a year earlier, as its operating profit fell 22%. Its earnings fell just short of Wall Street forecasts for the period.

“In the first quarter, deceleration in US retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia,” said the company’s earnings statement. “Given current macro conditions, we expect volume to remain under pressure.”

The company said that while January volumes were about what it had expected, the macroeconomic environment weakened, causing a 7% drop in volume in March compared to a year ago. That acceleration in the drop in volume “caused us pause,” said UPS CEO Carole Tome.

Shares of UPS (UPS) fell more than 6% in early trading on the news.

UPS had already forecast last year that its 2023 profit margin would be tighter after it reported a record profit in 2022. Now it expects full-year earnings to be at the low end of that outlook “due to challenging macro conditions and changes in consumer behavior.”

UPS estimates that it moves 6% of the US gross domestic product in its trucks every day. GDP represents the broadest measure of the US economy.

Besides facing a slowing economy, UPS also is engaged in contract negotiations with the Teamsters union, which represents more than 340,000 of its 444,000 US employees. The company faces an August 1 contract expiration, at which point the union could go on strike.

Tome tried to give a positive outlook on the ongoing labor negotiations, saying “good progress has been made” on a number of issues, including staffing for weekend deliveries and providing relief from heat in UPS delivery vans, which typically do not have air conditioning.

“While we expect to hear a great deal of noise during the negotiations, I remain confident that a win-win-win contract is very achievable and that UPS and the Teamsters will reach agreement by the end of July,” Tome told analysts on a conference call. “Like any negotiations… there’s going to be bumps along the way.”

Tome said UPS is seeing some packages divert to other carriers due to concerns about a possible strike. She said it “would be unreasonable to expect that we wouldn’t have any.” But she said UPS has top executives working closely with major customers to assure them about the state of negotiations.

But so far the comments coming from the Teamsters have not been nearly as optimistic about an agreement.

“This is not a game. But you wouldn’t know that based on UPS’s behavior,” said Teamsters General President Sean O’Brien in a statement earlier this month.

O’Brien has said in the past that the union does not want to go on strike, but it is prepared to do so if that’s what it takes to win the contract that members want.

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