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UPS has announced a significant shift in its relationship with Amazon, the e-commerce giant. The shipping and logistics company revealed that it will reduce its shipping volumes for Amazon by more than 50% by the second half of 2026.
As stated by CEO Carol Tomé during an investor call, “Amazon is our largest customer, but it’s not our most profitable customer.” This move comes as no surprise, given the decline in revenue from Amazon since the peak of the COVID-19 pandemic. In 2024, Amazon accounted for only 11% of UPS’ total revenue, which reached $91.1 billion.
It’s worth noting that this is not the first time UPS has made such a move. Back in 2023, the company shared plans to cut back its business with Amazon as the retailer’s revenue from outside delivery services dwindled due to its growing internal options for order fulfillment.
This decision is likely influenced by FedEx’s similar path taken in 2019 when it decided not to renew its ground-delivery contract with Amazon. Shortly after, Amazon blocked third-party sellers from using FedEx’s ground-delivery services.
UPS’ revised arrangement with Amazon aims to reorient the company’s focus towards more profitable ventures. While Amazon remains a significant customer for UPS, the decision highlights the growing importance of in-house logistics and delivery capabilities within e-commerce platforms like Amazon.
Source: http://www.engadget.com
