- Amazon is the biggest UPS customer, but not the most profitable
- UPS says it will reduce its Amazon agreement by more than 50% to help profitability
- Amazon “will continue to associate with [UPS]””
UPS has announced its intention to reduce its shipping volumes for Amazon by “more than 50%” under revised agreement with the global electronic commerce giant.
The change will come into force by the second half of 2026, the CEO of the UPS, Carol Tomé, indicating that the cause being that Amazon is not the most profitable customer of the delivery company, although He is his biggest.
Amazon represented only 11% of $ 91.1 billion in UPS revenue in 2024, against 13.3% in 2020, when online purchase figures induced by the pandemic increase.
UPS to reduce Amazon’s expeditions
Speaking during income from the fourth quarter 2024, Tomé said: “We make trade and operational changes which, as well as the fundamental changes that we have already made, will put us further to become a more profitable, agile and differentiated ups which is growing in the best parts of the market. »»
The company’s last full quarter of the company brought in $ 25.3 billion in revenues, or only 1.5% in annual shift. Current predictions suggest that total annual turnover for 2025 could drop to $ 89.0 billion, compared to $ 91.1 billion in 2024.
Amazon spokesperson Kelly Nantel said Techradar Pro: “Due to their operational needs, UPS has requested a reduction in volume and we certainly respect their decision. We will continue to associate with them and many other carriers to serve our customers. »»
This is not the first time that Amazon has lost delivery slots with a third -party company – In 2019, Fedex ended his contract with the retail giant.
Amazon has also been busy building up its own delivery team, because alongside its own fleet of vehicles, the company also operates a program of delivery service partners to help SMEs in the United States play their role in the Delivery of the last mile, giving them another flow of income.
UPS has also been busy reducing costs to discuss poor financial growth. In January 2024, he dismissed 12,000 workers as part of an effort to recover $ 1 billion in savings.
Amazon told us that the company had already proposed to increase the volumes of UPS and that it had a solid employment relationship with the delivery partner.
UPS refused to offer other comments beyond what was announced when he calls for results.
