UPS Completes Reduction in Amazon Package Volume; Amazon Shifts to Its Own Delivery Network
UPS has completed an 18-month effort to reduce its handling of lower-margin packages for Amazon, eliminating approximately 2 million daily shipments and $4.5 billion in related expenses. This strategic move improved UPS's profitability, with a rise in U.S. domestic revenue per piece by 9.3% and operating margin expanding to 8%. CEO Carol Tomé highlighted the success on its earnings call. Amazon has absorbed much of this lost volume through its own rapidly growing delivery network, which now handles more parcels than UPS or FedEx combined. According to logistics data firm ShipMatrix, Amazon delivered an estimated 6.7 billion U.S. packages in 2025 — making it the largest parcel carrier by volume. The company is also expanding rural delivery capacity with a $4 billion investment. Amazon's shipping costs have risen accordingly; its second-quarter worldwide shipping expenses reached $27.9 billion, up from $23.4 billion year-over-year. This shift reflects Amazon’s growing reliance on in-house logistics to manage rising e-commerce demand.
Topics: Amazon logistics profitability UPS volume reduction