"This was a company that was once all about volume, was all about customer service, was all about growth, was all about sales, was all about creating jobs." - Sean O'Brien, General President, International Brotherhood of Teamsters
In 2024, Amazon accounted for 11% of UPS's revenue but between 20% and 25% of U.S. network volume.
When UPS announced that they were planning to reduce their Amazon package volume by over 50% in early 2025, the market responded negatively. Not only did their revenue decline, but they were also forced to reduce headcount by 48,000, shutter 93 facilities, and restructure their delivery network.
UPS is working through the fallout resulting from that decision, which includes offering six-figure buyouts to unionized drivers. The Teamsters are pushing back hard, arguing that even voluntary driver buyouts violate contract terms and undermine union protections.
This may look like a story about cost cutting, but it's really about UPS's efforts to shift from volume to profit margin in a competitive market.
In this episode of the Art of Supply podcast, Kelly Barner covers:
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