Uploaded February 2026 | Updated September 2026, 2 weeks ago
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In January 2025, UPS announced it would cut Amazon shipping volume in half. The stock dropped fast and headlines said the company was in trouble. But the reaction missed the point. This move was not a panic decision. It was the end of a strategy UPS started years earlier. Back in 2021, leadership quietly began reducing Amazon volume, even while ecommerce kept growing. Amazon stayed a large customer, but it was never a great one. Lots of small residential deliveries. High labor. High last mile costs. Thin margins. By 2025, Amazon made up a huge share of packages but a much smaller share of revenue. Cutting that volume meant fewer trucks, fewer facilities, and fewer workers tied to low margin routes. Costs dropped fast. Revenue fell too, but profit per package went up. Operating margins improved even as total revenue declined. UPS was choosing better packages instead of more packages. This is not new. FedEx walked away from Amazon years earlier and later returned only for large profitable deliveries. Amazon has also become its own shipping giant, controlling more of the network each year and squeezing carriers on price. That shift forced UPS to adapt or get trapped in low margin work. The result is a bigger lesson. In logistics, scale alone does not win. Margins matter more than volume. Sometimes firing your biggest customer is the only way to stay in control.
Timestamps:
0:00 - UPS Cuts Amazon
0:36 - Cutting Your Biggest Customer
3:27 - Better Packages
8:27 - The Changing Game
Resources:
pastebin.com/U3WDFLft
Disclosure: This video is sponsored by Hostinger. Some of the links in this description may be affiliate links, which means I may earn a small commission at no additional cost to you.
Build your e‑commerce store in minutes: hostinger.com/logicallyanswered. Use code LOGICALLYANSWERED for extra 10% off
In January 2025, UPS announced it would cut Amazon shipping volume in half. The stock dropped fast and headlines said the company was in trouble. But the reaction missed the point. This move was not a panic decision. It was the end of a strategy UPS started years earlier. Back in 2021, leadership quietly began reducing Amazon volume, even while ecommerce kept growing. Amazon stayed a large customer, but it was never a great one. Lots of small residential deliveries. High labor. High last mile costs. Thin margins. By 2025, Amazon made up a huge share of packages but a much smaller share of revenue. Cutting that volume meant fewer trucks, fewer facilities, and fewer workers tied to low margin routes. Costs dropped fast. Revenue fell too, but profit per package went up. Operating margins improved even as total revenue declined. UPS was choosing better packages instead of more packages. This is not new. FedEx walked away from Amazon years earlier and later returned only for large profitable deliveries. Amazon has also become its own shipping giant, controlling more of the network each year and squeezing carriers on price. That shift forced UPS to adapt or get trapped in low margin work. The result is a bigger lesson. In logistics, scale alone does not win. Margins matter more than volume. Sometimes firing your biggest customer is the only way to stay in control.
Timestamps:
0:00 - UPS Cuts Amazon
0:36 - Cutting Your Biggest Customer
3:27 - Better Packages
8:27 - The Changing Game
Resources:
pastebin.com/U3WDFLft
Disclosure: This video is sponsored by Hostinger. Some of the links in this description may be affiliate links, which means I may earn a small commission at no additional cost to you.
