
Visit Our Sponsors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Photo: iStock / RiverNorthPhotography
UPS has reached an agreement with Amazon to slash its delivery volumes with the e-commerce giant by more than 50% by the latter half of 2026.
While Amazon accounted for 20-25% of its UPS's U.S. package volumes, making Amazon UPS's largest customer, that business was responsible for under 12% of the delivery company's total revenue in 2024, according to UPS's fourth quarter earnings report released on January 30. CEO Carole Tomé told investors in a conference call that Amazon is "not our most profitable partner," and that UPS is "taking control of our destiny" moving forward. In a statement to Reuters, Amazon said that they respect the decision from UPS to scale back delivery volumes, adding that it will "continue to partner with them and many other carriers to serve our customers." Tomé further clarified that UPS doesn't plan to cut the remaining half of its business with Amazon after 2026, and that she believes the company is "landing at the right spot with this accelerated glide down."
UPS has struggled with declining shipping volumes for years, and has sought to cut costs to account for those losses. In 2024, the company permanently shuttered 11 facilities, with plans in 2025 to close up to 10% of its buildings, reduce its fleet size, and cut its labor force. UPS also set a revenue forecast of $89 billion for 2025, below the average analyst expectation of nearly $95 billion.
This also comes as Amazon has continued to reduce its reliance on external delivery services. In 2022, the company delivered more packages to U.S. homes than UPS for the first time in a single year, after eclipsing FedEx two years before that. By 2023, Amazon's logistics arm boasted the second highest market share by parcel volume in the country at 27%, trailing only the U.S. Postal Service's 31% market share.
RELATED CONTENT
RELATED VIDEOS
Timely, incisive articles delivered directly to your inbox.