United Parcel Service (UPS) announced plans to halve its Amazon package volume by the second half of 2026, citing concerns over profitability. The move has sent shockwaves through the market, with UPS shares plummeting over 14% on Thursday. According to CEO Carol Tome, Amazon is not the most profitable customer for UPS, but it remains a significant one, accounting for nearly 12% of the company’s revenue.
The decision was made despite Amazon’s request for reduced volume, which UPS believes would lead to diminishing returns if left unaddressed. UPS expects its U.S. domestic revenue to fall by 2.2% in 2025, contributing to a disappointing forecast of $89 billion. Analysts have expressed concerns that the move will hinder earnings growth.
Amazon has responded to the news, stating that it respects UPS’s decision and looks forward to continuing their partnership. While Amazon delivers many packages through its own network, it still relies on carriers like UPS for complex deliveries. Morningstar analyst Matthew Young noted that taking delivery in-house would require significant investment.
Meanwhile, Robert F. Kennedy Jr.’s confirmation hearing as the new HHS secretary has sparked controversy. Despite his claims of change, Kennedy refused to acknowledge the link between vaccines and autism, citing a need to look at data rather than preconceived notions. He also expressed disdain for the pharmaceutical industry’s influence in Washington.
As the nomination process unfolds, it remains uncertain whether Kennedy will be confirmed. With only three Republicans required to vote against him, critics argue that he may not have made the decision easier for those on the fence. The White House has expressed confidence in his confirmation, but many experts predict a nail-biter of an outcome.
Source: https://www.axios.com/2025/01/30/ups-stock-amazon-deliveries