SANDY SPRINGS, Ga. — Sandy Springs-based shipping company United Parcel Service, aka UPS, announced Friday it would be reducing how many packages it carries for its largest customer by 50% through 2026.
During the fourth quarter earnings call, UPS CEO Carol B. Tomé said the company would be making changes in order to push them toward stronger profitability as a company.
“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,” Tomé said in a statement.
Analyst Tom Wadewitz said its largest customer is Amazon, the online retailer known for fast delivery, yearly subscriptions and being one of the world’s largest marketplaces.
[DOWNLOAD: Free WSB-TV News app for alerts as news breaks]
TRENDING STORIES:
- Gwinnett County Schools superintendent dismissed by school board
- 2 soldiers killed in crash during training exercise at GA Army post
- Lawmakers introduce bill to increase Georgia teachers’ amount of sick leave
Speaking to the needs of UPS and its overall customer base, Tomé said the multi-decade partnership with Amazon was good but wasn’t the most profitable pairing.
“We’ve been a partner to Amazon for nearly 30 years, and we hold that company in high regard,” she said. “Amazon is our largest customer, but it’s not our most profitable customer. Its margin is very dilutive to the U.S. domestic business. Our contract with Amazon came up this year, and so we said it’s time to step back for a moment and reassess our relationship.”
The CEO said if action isn’t taken by UPS, they’ll see diminishing returns on their business. The choice they made was to speed up the reduction in Amazon package volume.
Tomé told investors they expect to hit the 50% reduction by June 2026. .
Changes to their partnership with the U.S. Postal Service also led to performance differences, according to UPS leaders, as a result of USPS changing its operating model.
[SIGN UP: WSB-TV Daily Headlines Newsletter]
©2025 Cox Media Group
