Shares in United Parcel Service (UPS) have fallen due to a below-forecast earnings report and the company deciding to distance itself from longtime partner, Amazon.
Newsweek has contacted UPS via email for comment.
Why It Matters
UPS is the largest courier in the U.S., and one of the largest companies in the country by revenue, having brought in $91.1 billion in 2024, according to its latest earnings report.
As a key player in the delivery and supply-chain management sphere, UPS transports billions of packages per year, and any threats to its operations could result in significant market share gains by competitors such as FedEx.
What To Know
UPS shares are currently trading at $110.26 as of 12 a.m. ET, January 30, down 17.3 percent from their Wednesday closing price of $133.78. If the stock cannot recover by the closing bell, this will mark the largest one-day sell-off by UPS in the company's history.
This decline follows a solid few weeks for the company, which prior to Thursday was up around 8 percent since the start of the year.
On Thursday, UPS released its results for the year ended December 31, in which it reported $91.1 billion in revenue, a slight improvement on 2023. However, the company also laid out guidance for $89 billion in revenue for 2025, well below FactSet consensus estimates of $95 billion.
More significantly, UPS announced that it had reached an in-principle agreement with its largest customer, Amazon, to cut transported order volumes "by more than 50 percent by the second half of 2026."
Amazon and its affiliates accounted for around 11.8 percent of UPS revenue in 2023.
The move comes as Amazon continues to expanding its own logistics network—developing an extensive system of fulfillment centers, distribution hubs, and transportation fleets across the globe—while reducing the number of packages handled by UPS.
What People Are Saying
UPS CEO Carol Tomé said: "We are making business and operational changes that, along with the foundational changes we've already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market.
Financial commentator and podcast host, Shay Boloor, wrote on X, formerly Twitter: "By 2026, [UPS] will slash Amazon's package volume by 50 percent. Amazon isn't outsourcing—it's owning the supply chain. Speed, efficiency and margins follow. Rivals aren't just losing packages. They're losing relevance."
What Happens Next?
To offset the costs associated with its "transformation strategy," UPS said that it was undertaking a "network reconfiguration which is expected to lead to consolidations of our facilities and workforce," and that these initiatives are "expected to yield approximately $1 billion in annualized savings."
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