UPS Share the tank after low advice, plan to reduce Amazon deliveries

Actions of United package service plunged more than 15% on Thursday after the company has published low income directives for the year and said it was planning to reduce deliveries for AmazonIts greatest client, more than half.

The navigation giant declared in its report on the profits of the fourth quarter that it “had concluded an agreement in principle with its greatest client to reduce its volume by more than 50% by the second half of 2026.”

At the same time, UPS said that it reconfigures its American network and launching multi -year efficiency initiatives which, according to him, will lead to savings of around 1 billion dollars.

The CEO of UPS, Carol Tome, said during a call with investors that Amazon is the largest UPS customer, but it is not the most profitable customer of the company. “Its margin is very dilutive for American national affairs,” she added.

“We make trade and operational changes which, as well as the fundamental changes that we have already made, will put us further on the way to become a more profitable, agile and differentiated UPS that develops in the best parts of the market”, ” Tome said in a statement.

Amazon spokesperson Kelly Nantel told CNBC in a statement that UPS had asked for a volume reduction “due to their operational needs”.

“We certainly respect their decision,” Nantel said in a statement. “We will continue to associate with them and many other carriers to serve our customers.”

Amazon declared before the announcement of the UPS which he had proposed to increase the volumes of UPS.

UPS provides for a turnover of $ 2025 of $ 89 billion, down from revenues of $ 91.1 billion in 2024. It is much lower than consensual estimates for 2025 incomes of $ 94.88 billion, According to analysts interviewed by LSEG.

For the fourth quarter, UPS has missed income, declaring $ 25.30 billion against 25.42 billion analysts planned in a survey by LSEG.

Amazon has been based for a long time on a mixture of large carriers for deliveries, including UPS, Fedex and the American postal service. But it has decreased the number of packages sent through UPS and other carriers in recent years, because it seems to have more control over deliveries.

Amazon quickly built its own logistical empire since a 2013 vacation fiasco left its packages blocked in the hands of external transporters. The company now oversees thousands of last Mile delivery companies which deliver exclusively packages for Amazon, as well as an internal grass network of aircraft, trucks and ships. According to certain estimates, Amazon’s internal logistics operations have grown up to compete or exceed the size of the main carriers.

UPS, for its part, has taken more aggressive cost control measures, including the restoration of more profitable delivery customers. On the call of investors, Tome has highlighted health care, small businesses, international and businesses to businesses, or B2B, such as “the best parts of the market” in which it was more strongly based . During the last quarters, UPS benefited from an influx of volume of the retailers of good deals Temu and Shein, who quickly gained popularity in the United States

Last January, UPS dismissed 12,000 employees as part of an offer to make $ 1 billion in cost savings.