UPS Faces Significant Threat from Amazon’s New Service
Shares of UPS (NYSE: UPS) fell by 9.8% around 11:45 a.m. following news that Amazon.com (NASDAQ: AMZN) launched Amazon Supply Chain Services (ASCS), which directly targets the small and medium-sized business (SMB) segment—a core market for UPS.
UPS plans to reduce its delivery volumes for Amazon by 50% between early 2025 and mid-2026 in response to this competition. Amazon’s ASCS aims to attract large enterprises such as 3M and Procter & Gamble, while posing a substantial risk to UPS’s existing SMB customers, especially those not exclusively selling on Amazon.
With Amazon’s established logistics capabilities, the company is poised to gain market share or lessen UPS’s pricing power in the sector, complicating UPS’s strategy of raising prices to offset declining volumes anticipated in 2026.
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