© Alexey Novikov
30/01/2025
UPS has announced that it will be slashing the volumes it handles for Amazon by 50% going into the second half of next year.
The news was announced earlier today (30 January) as part of a cost-cutting initiative by the express operator, which is eyeing a $1bn reduction in spending, with an emphasis on cuts to air, labour, and road costs as well as closing a number of buildings.
During the company’s earnings call, chief executive Carol Tome said: “Amazon is our largest customer, but not our most profitable,” citing the “dilutive” impact it has on UPS’ margins.
Even so, the ecommerce behemoth made up just shy of 12% of the company’s 2024 revenues, with the news precipitating a 15% drop in value, adding further woe after a difficult three years in which UPS has lost a third of its value following indications of post-pandemic bump.
Compounding this, Q4 2024 revenues of $24.3bn fell shy of the forecast $25.42bn, with it expecting to hit $89bn for the full-year 2025.
Per reports, in the absence of Amazon, it seems the company is looking to take on the small parcel sector that it had previously shunted over to the US Postal Service, with it also hoping to make gains from having signed on the likes of Shein and Temu.
