UPS plans to cut its Amazon delivery business in half

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UPS plans to cut its Amazon delivery business in half

UPS continues to sever its business relationship with Amazon. By the second half of 2026, UPS said it would reduce its delivery volumes to Amazon by more than 50 percent under a revised agreement between the companies.

“Amazon is our largest customer, but not our most profitable,” said CEO Carol Thome during a meeting with investors on the latest financial results of the transportation and logistics company.

Business with Amazon accounted for about 11 percent of UPS’s revenue in 2024, which totaled $91.1 billion. Amazon accounted for a larger share of UPS’s revenue during the peak of the COVID-19 pandemic; in 2020, the retailer was responsible for 13.3 percent of the company’s annual revenue. UPS has shared similar plans to reduce its business with Amazon in 2023, as its revenues from the retailer have declined from pre-quarantine levels.

Although Amazon relies on external companies for some types of delivery, these relationships sometimes become fragile as the retailer continues to expand its own delivery capabilities. In 2019, FedEx followed a similar path of unbundling its services from Amazon when it announced that it would not renew its ground delivery contract with a major technology partner. A few months later, Amazon blocked third-party sellers from using FedEx ground delivery services.

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