UPS to cut Amazon volume by 50% by H2 2026

UPS reported $91.1 billion in 2024 consolidated revenues, an increase of 0.1% from 2023. This is a slight year-over-year improvement from 2023, which saw $91 billion in consolidated revenues, a decrease of 9.3% from 2022. [caption id="attachment_56866998" align="aligncenter" width="1235"] UPS is retiring MD-11Fs from its fleet. (Courtesy/UPS)[/caption] However, the company’s shares fell more than 14% after Chief Executive Carol Tome said on today’s earnings call that UPS had reached an agreement to halve its volume with its largest customer, Amazon. Strategic changes While UPS closed out 2024 with “outstanding peak delivery,” Tome said three challenges became apparent: The slow growth market of the U.S. small package segment; Future diminishing returns from the concentration of volume and revenue from Amazon; and The company’s reliance on the U.S. Postal Service (USPS) for SurePost, a hybrid solution in which the USPS handles final-mile delivery. To address these concerns, Tome said, UPS: Will reconfigure its U.S. network through several multi-year initiatives that the company expects to drive about $1 billion in savings; Has reached an agreement with Amazon to reduce Amazon’s volume with UPS by more than 50% by the second half of 2026; and Is no longer, as of Jan. 1, using USPS for SurePost. Full-year earnings As of Dec. 31, 2024, UPS had outstanding orders for twenty-five 767-300s to add to the eighty-two already in its fleet. The company aims to replace its MD-11Fs with the 767s. As of Dec. 31, UPS owned twenty-nine MD-11Fs. UPS also reported for full-year 2024: Adjusted operating profit of $8.9 billion, down 9.9% YoY; Adjusted diluted earnings per share of $7.72, down 12.1% YoY; U.S. domestic segment revenue of $60.4 billion, up 0.3% YoY; International segment revenue of $18 billion, up 0.7% YoY; and Revenue for Supply Chain Solutions, the company’s forwarding and logistics arm, of $12.7 billion, down 1.5% YoY. Q4 earnings UPS reported $25.3 billion in fourth-quarter 2024 consolidated revenues, up 1.5% YoY. The company’s Q3 consolidated revenue was $22.2 billion, up 5.6% YoY, and its Q2 consolidated revenue was $21.8 billion, down 1.1% YoY. The company also reported for Q4: Adjusted operating profit of $3.1 billion, up 11.2% YoY; Adjusted diluted earnings per share of $2.75, up 11.3% YoY; U.S. domestic segment revenue of $17.3 billion, up 2.2% YoY; International segment revenue of $4.9 billion, up 6.9% YoY; and Supply Chain Solutions revenue of $3.1 billion, down 9.1% YoY. UPS attributed the revenue increase in the U.S. domestic segment to a 2.4% increase in revenue per piece to $12.25 and increases in air cargo rates. Q4 revenue per piece in the U.S. domestic segment was positive for the first time in 2024, UPS said. International segment revenue per piece fell 0.4% YoY to $20.60. The company attributed the revenue increase in the international segment to an 8.8% increase in average daily volume. U.S. domestic segment average daily volume fell 0.3% YoY. As for Supply Chain Solutions, UPS attributed the decline in revenue to the company’s divestiture of Coyote Logistics. Transportation solutions company RXO acquired Coyote from UPS for more than $1 billion in September 2024. Advancements About 63% of UPS’ U.S. volume flowed through automated facilities in Q4, compared with 60% in Q4 2023, the company reported. The company also completed forty-nine operational closures in 2024, including permanently closing eleven buildings. Looking ahead, UPS acquired Frigo-Trans, a European health care logistics company specializing in cold chain, and its sister company BPL this month for an undisclosed amount. And, in December, UPS opened two health care cross-dock facilities, in Italy and Germany. “These moves further expand our cold chain capabilities to serve a growing European market,” Tome said. Shares of UPS ( NYSE: UPS ) were down 14.11% from market open to $114.90 as of market close today. UPS has a market capitalization of $97.85 billion. Register now for Cargo Facts' essential regional events for industry stakeholders: Cargo Facts LATAM 2025 on Feb. 10-11 at the Pullman Sao Paulo Guarulhos Airport in Brazil; Cargo Facts Asia 2025 on March 24-26 at the W Shanghai in China; and Cargo Facts EMEA 2025 on May 6-8 at the Shangri-La Bosphorus in Turkey.

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