UPS Revenue Outlook and Challenges
UPS (NYSE: UPS) is facing significant revenue declines tied to its decision to voluntarily reduce Amazon delivery volume by 50% from early 2025 to mid-2026. Amazon represented 11.8% of UPS’s total revenue in 2024. Revenue projections indicate a drop from $91 billion in 2024 to $88.7 billion in 2025, with a slight recovery to $89.7 billion expected in 2026.
In the first quarter of 2023, UPS experienced an 8% decline in U.S. domestic package volume, with two-thirds attributed to reduced Amazon deliveries. Additionally, costs from transitioning its delivery network and rising fuel expenses are impacting near-term profitability. UPS’s CFO announced $150 million in transitional costs for the first quarter but expects improvement in the second half of the year.
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