UPS plans to cut its business with Amazon by half by mid-2026, citing decreased profitability from these packages. CEO Carol Tomé emphasized that this decision was proactive for UPS, not pressured by Amazon. Current business with Amazon constitutes about 20% of UPS's US volume, but it is not lucrative, leading to the move. While UPS transitions away from a significant customer, analysts suggest it could enhance focus on more profitable business segments. The remaining contract includes handling returns for Amazon, which remains a strong point for UPS.
UPS is cutting its business with Amazon in half by mid-2026, primarily due to diminishing profitability despite Amazon being the largest customer.
Carol Tomé stated, 'This was not their ask; this was UPS taking control of our destiny.' The company aims to enhance margins.
The drawdown will allow UPS to focus on higher-yielding, margin-enhancing volumes, as analyzed by Goldman Sachs.
An Amazon spokesperson acknowledged the decision, stating, 'We'll continue to partner with them and many other carriers to serve our customers.'
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