UPS shares experienced a significant drop after the company announced plans to reduce Amazon deliveries by more than 50% by the second half of 2026. CEO Carol Tome stated that this move aims to make UPS more profitable, agile, and differentiated by focusing on higher-margin segments. While Amazon is UPS's largest customer, it's not the most profitable. UPS is also reconfiguring its U.S. network and implementing efficiency initiatives expected to save $1 billion.
UPS shares tumbled on Thursday after the shipping giant said it would slash Amazon deliveries by more than half.
UPS has shifted away from less profitable contracts in recent years, while Amazon has built up its own in-house logistics empire.plunged more than 15% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries forthat it "reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026.
UPS CEO Carol Tome said on a call with investors that Amazon is UPS' largest customer, but it's not the company's most profitable customer. "Its margin is very dilutive to the U.S. domestic business," she added. "We certainly respect their decision," Nantel said in a statement. "We'll continue to partner with them and many other carriers to serve our customers."UPS forecast 2025 revenue of $89 billion, down from revenue of $91.1 billion in 2024. That's well below consensus estimates for 2025 revenue of $94.88 billion, according to analysts polled by LSEG.
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