UPS Wins by Winding Down Amazon Partnership

Shares jumped as much as 4% through Tuesday’s trading session, before evening out near the end of the day.

January 28, 2026Updated 9 hours ago

Break-ups are hard, but staying in a toxic relationship is even worse. Just ask UPS, which is in the midst of splitting up with longtime partner Amazon.

In its fourth-quarter earnings call on Tuesday, the parcel-delivery giant conceded that this would lead to a near-term downturn in delivery volume — but promised a much more profitable business in the future. And as it turns out, Wall Street loves a firm that understands healthy boundaries, practices self-preservation and honors its own needs.

Turn Down the Volume

The e-commerce giant once loomed large in UPS’s life. According to executives who spoke to Supply Chain Dive a year ago, Amazon accounted for as much as one-quarter of all UPS deliveries, but only about 11% of UPS’s total revenue. “Amazon is our largest customer, but it’s not our most profitable customer,” CEO Carol Tome told Reuters last year when the conscious uncoupling was first announced, adding that the partnership proved “extraordinarily dilutive” to the company’s margins.

Still, the only thing worse than an unfruitful client is a ruthless competitor. Somehow, Amazon has become both. Call it a one-sided relationship: Amazon is UPS’s top (and most problematic) customer, but Amazon uses UPS mainly as a release valve when its own growing logistics network becomes overwhelmed:

After surpassing both UPS and FedEx in total yearly parcel volume in 2023, according to the Pitney Bowes Shipping Index, Amazon delivered 6.3 billion parcels in 2024 compared with UPS’s 4.7 billion. In fact, Pitney Bowes projects that Amazon will surpass the United States Postal Service in parcel volume by 2028, when it will deliver roughly 8.4 billion packages.
In January last year, UPS said it planned to reduce Amazon delivery volume by 50% over the next 18 months. At the one-year check-in on Tuesday, UPS said everything was going according to plan and that it will “glide down another million pieces per day” for the next six months.

The Daily UPSide: Achieving a significantly scaled-back Amazon partnership will serve as an “inflection point in the execution of our strategy to deliver growth and sustained margin expansion,” Tome said Tuesday, as the company announced projected 2026 revenue of $89.7 billion, above most analyst expectations of about $88 billion (UPS also announced layoffs of about 30,000 employees). Shares jumped as much as 4% through Tuesday’s trading session, before evening out near the end of the day. Sometimes, less is more.