UPS today (January 30) unveiled surprise plans to reduce Amazon delivery volumes by 50% within two years and save $1 billion in US network costs after beating its Q4 financial targets with double-digit operating profit growth on a low revenue increase.
Announcing its Q4, 2024 financial results along with a 2025 outlook, the US package giant announced a “set of strategic actions” – referring to Amazon, which accounts for about 10% of its US volumes, as “its largest customer”, and also confirming its SurePost insourcing move.
UPS wrote: “First, it has reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026; second, effective January 1, 2025, the company has insourced 100% of its UPS SurePost product; and third, in connection with these efforts, the company is reconfiguring its U.S. network, and launching multi-year “efficiency reimagined” initiatives to drive approximately $1.0 billion in savings through an end-to-end process redesign.”
CEO Carol Tomé explained: “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.”
Higher profits
