SIMIC

UPS says it will slash its Amazon deal by over 50 per cent to help profitability, reports New York's TechRadar.

The change will come into effect by the second half of 2026, with UPS chief executive Carol Tome indicating the cause being that Amazon is not the company's most profitable customer, despite being its biggest.



Amazon only accounted for 11 per cent of UPS's US$91.1 billion revenue in 2024, down from 13.3 per cent in 2020 when pandemic-induced online shopping saw figures rise.



Speaking at UPS's Q4 2024 earnings call, Ms Tome said: "We are making that will put us the path to be more profitable."



The company's most recent full quarter brought in $25.3 billion in revenue, up a mere 1.5 per cent year on year. Current predictions suggest that total annual revenue for 2025 could drop to $89 billion, down from $91.1 billion in 2024.



Said Amazon spokeswoman Kelly Nantel: "We certainly respect their decision. We'll continue to partner with them and many other carriers to serve our customers."



It's not the first time Amazon has lost delivery slots with a third-party firm - in 2019, FedEx ended its contract with the retail giant.



Amazon has also been busy building up its own delivery team, as alongside its own fleet of vehicles, the company also operates a Delivery Service Partner program to help SMBs across the US play their role in last-mile delivery, giving them another revenue stream.



UPS has also been busy cutting costs to address poor financial growth. In January 2024, it laid off 12,000 workers as part of an effort to claw back $1 billion in savings.