UPS has announced plans to cut its business with Amazon by half by mid-2026, citing declining profitability from the partnership. The move is part of a broader effort by UPS to refocus on higher-yielding volumes and reduce its reliance on dilutive customers.
CEO Carol Tomé stated that while Amazon’s business with UPS was significant, it had become less profitable for the company. With Amazon shipments making up approximately 20% of UPS’s US volume, the decision to cut ties comes as no surprise.
The reduction in volume is expected to cost UPS business in the short term, but analysts see opportunities for the company to adapt and focus on more lucrative partnerships. Tomé emphasized that UPS will continue to handle returns for Amazon at its 5,200 store locations, a service that is unlikely to change anytime soon.
Amazon has been expanding its logistics capabilities in recent years, including launching new shipping options for sellers. This shift may have contributed to the decline in profitability from UPS’s partnership with the e-commerce giant. Despite this, Amazon remains committed to partnering with carriers like UPS to serve its customers.
Source: https://www.businessinsider.com/ups-ship-fewer-amazon-packages-shares-drop-2025-1