You’ve Got (Less) Mail

Hi, today we're exploring: (1) Why activist investors are targeting Southwest, (2) Mail volumes at USPS, (3) Gen Z and Millennial climate actions. Good morning! The pope is welcoming over 100 entertainers, including Conan O’Brien, Chris Rock, Whoopi Goldberg, and Jimmy Fallon to the Vatican this Friday to “[celebrate the beauty of human diversity](. Today we're exploring: - Clipped wings: An activist investor has taken a stake in Southwest Airlines. - Pandora’s box: USPS wants to be more competitive in package delivery. - Action, reaction: The steps Gen Z and Millennials are taking to protect the environment. Have feedback for us? Just hit reply — we'd love to hear from you! TOGETHER WITH Elliott Investment Management has built a $2B stake in Southwest Airlines, according to the [Wall Street Journal]( as the fund — famous for agitating change at underperforming companies — targets the low-fare, no-frills airline. Not that kind of activism Elliott is an activist, a special brand of investing that seeks to make tangible changes at public companies in the hope of lifting the company’s share price. In this regard, Elliott’s reputation precedes it: shares in Southwest are up 8% in pre-market trading before any specific details of what the fund actually wants it to do have been revealed. But, it’s fair to assume that Elliott would like Southwest to make more money... Indeed, Southwest is significantly less profitable than it was pre-pandemic. The company posted net income of $977M in 2021, just 40% of its 2019 figure, a result that only got worse in 2022 and 2023, when net profit came in at $465M, less than one-fifth of its best years. In its most recent quarter, it lost $230M. If you’ve been reading [our coverage]( of the economy, you might be wondering “wait a second, I thought consumers were struggling… wouldn’t all of those cost-conscious fliers benefit Southwest?” That’s a logical conclusion, but air travel has been one category where consumers have been willing to splurge a bit more — “revenge travel”, as it’s been called. But Southwest’s problems also seem to be partly of their own making. The brand was damaged by a high-profile [meltdown]( in December 2022, which cost the airline $140M, and it's dealing with a delay in deliveries from Boeing, the company’s exclusive supplier… another aviation brand that’s not exactly on top of the world. [Read this on the web instead]( Keeping posted Postmaster General Louis DeJoy’s 10-year plan to modernize the US Postal Service — and turn around cumulative losses of $98B in the past 17 years alone — has hit a snag. That’s according to reporting from the [Wall Street Journal]( which revealed that the new one-million-square-foot postal processing facility near Atlanta is already experiencing delays and package backlogs, despite only fully opening in February. As a result, Georgia’s inbound first-class mail took on average 2.2 days longer to arrive in March than in the same period last year. While the sorting center has all the hallmarks of DeJoy’s $40B overhaul proposal — including advanced equipment to process high volumes of mail/packages — union leaders noted staff shortages, poor management, and overwhelmed machines among reasons for the bottleneck, citing a “rush to implement plans”. Union scrutiny aside, a mix of soaring production costs and limits on price hikes has put the USPS firmly in the red in past years. And, with overall mail volumes declining, the institution has been trying to pivot towards the more lucrative package business to assuage losses, with 40% of its $78B of revenue last year coming from parcel deliveries, despite only making up 6% of volume. But that’s a space that’s always had serious competition in UPS, FedEx, and more recently, Amazon, which is [now bigger]( than both of its older parcel rivals. [Read this on the web instead]( [Sponsored by Rocket Mortgage]( Get a home-turf advantage There’s no place like home — and when it comes to investments, that still rings true. Per an [April 2024 Gallup poll]( Americans of all income levels perceive real estate as the best long-term investment. With [home values continuing to rise]( that perception makes sense… but buyers are often hard-pressed to get a foot in the door. [Rocket Mortgage]( makes that step easier, with a range of options for every prospective homeowner. Rocket has experts on hand when you need them, and in-app tools for when you don’t. Whichever path you take, Rocket ensures you lay the financial foundations of a smart investment and a dream home. Right now, Chartr readers can save $1000 on closing costs with Rocket by [locking in a loan at this link]( [Save $1000 on closing costs with Rocket Mortgage¹]( Checking in Deloitte’s Global 2024 [Gen Z and Millennial Survey]( the latest annual report that dropped in May this year, revealed a lot about how the youngest generations of adults are doing, with insights into everything from how they feel about their socio-economic prospects (mostly better), to their view of GenAI (mostly uncertain). However, one element of the report caught our eye. Deloitte asked over 14K zoomers (those born between 1995 and 2005, according to the survey) and more than 8K millennials (1983-1994) about what they’re actually doing to drive climate action. More than 1 in 4 millennials and Gen Zers reported following vegetarian or vegan diets, for example, while over a third of respondents from each cohort said they’re avoiding fast fashion. However, what the survey implied was almost more important. If 35% of Gen Z respondents said they already actively avoid fast fashion, that’s interesting, but it also suggests that 65% of Gen Z aren’t yet onboard… which goes a long way in explaining why Shein and other low-cost, youth-focused fast fashion brands have exploded. It’s often easier to think of generations as monoliths — that, of course, isn’t the reality. Gen Z are almost certainly the most sustainability conscious generation ever, and some members of that demographic are climate activists, but many are not. Shein wouldn’t be an $80B+ behemoth shifting $5 t-shirts if it wasn’t selling something millions of people wanted. [Read this on the web instead]( More Data • Americans' appetite for dining out is set to break records in 2024, with the U.S. restaurant industry projected to hit $1.1T in sales by the end of the year, according to the [National Restaurant Association](. • At 98, legendary actor and comedian Dick Van Dyke makes history as the oldest winner ever at the [Daytime Emmys](. • 36% of Americans see real estate as the best long-term investment… ahead of stocks and mutual funds, gold, and savings accounts or CDs. [Rocket Mortgage helps buyers]( get a foot in the door — and Chartr readers can save $1000 on closing costs¹ by [locking in a loan here]( • Norway's colossal $1.7T wealth fund, the 8th largest Tesla shareholder, says it will oppose Elon Musk's pay [package](. • Microsoft CEO Satya Nadella is the most admired chief executive among his peers in the [Fortune 500](. **This is sponsored content. Hi-Viz • Great interactive chart on [CEO pay vs. shareholder returns](. Off the charts: Which drink has tied Pepsi as America’s second favorite carbonated soft drink? [Answer below.] [Answer here](. Thanks for stopping by! Have some [feedback](mailto:daily@chartr.co?subject=Feedback&body=Hi%2C%0A%0AI%20like%20the%20newsletters%2C%20but%20I%20had%20a%20thought%20for%20you...) or want to [sponsor]( newsletter](mailto:james@sherwoodmedia.com?subject=Chartr%20NL%20Sponsorship%20Enquiry%20)? Not a subscriber? Sign up for free below. [Subscribe]( Advertiser's Disclosures: ¹Clients will receive a lender credit of $1,000 when they lock a loan on or after October 20th, 2023, utilizing the Chartr Newsletter application link. Offer cannot be retroactively applied to previously closed/locked loans. Offer does not apply to new loans submitted through non-retail loan originators, including brokers. Additional restrictions apply. Rocket Mortgage reserves the right to cancel/modify this offer/terms/conditions at any time. 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