- Amazon is the largest customer in UPS, but it is 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 plans to reduce its shipping volumes for Amazon by “more than 50%” under a reviewed agreement with the global electronic commerce giant.
The change will enter into force in the second half of 2026, with the UPS CEO, Carol Tomé, indicating the cause of Amazon is not the most profitable customer of the delivery company, despite being its greatest.
Amazon only represented 11% of the income of $ 91.1 billion UPS in 2024, below 13.3% in 2020, when online purchases induced by the pandemic saw the figures.
UPS to reduce Amazon shipments
Speaking in the profits of the fourth quarter of the fourth quarter of UPS, Tomé declared: “We are making commercial and operational changes that, together with the fundamental changes that we have already made, they will put us more on the way to become a more profitable UPS and differentiated that it is. growing in the best parts of the market. “
The most recent quarter of the company raised $ 25.3 billion in income, only a single 1.5% year after year. Current predictions suggest that total annual income by 2025 could fall to $ 89.0 billion, below $ 91.1 billion in 2024.
Amazon spokeswoman Kelly Nantel CNBC: “We certainly respect their decision … we will continue associated with them and with many other operators to serve our clients.”
It is not the first time that Amazon loses the delivery slots with a third -party company: in 2019, Fedex ended his contract with the retail giant.
Amazon has also been occupied by building its own delivery team, as together with its own vehicle fleet, the company also operates a delivery service program to help SMEs in the United States to play their role in the delivery of last mile, giving them another income flow.
UPS has also been occupied by reducing costs to address bad financial growth. In January 2024, he fired 12,000 workers as part of an effort to recover $ 1 billion in savings.
Techradar Pro He has asked UPS and Amazon comments on the news, but we also don’t receive an immediate response from either.
