UPS has cut the package volume it handles for Amazon by 50% over the past 18 months as part of a "better, not bigger" strategy, CEO Tomé said in an interview with WSJ Leadership Institute President Alan Murray. Tomé said Amazon once accounted for more than 13% of UPS revenue, yet the company was making no money on that business, prompting an 18-month transformation in which UPS closed buildings and reduced its workforce. The two companies reached agreement on which packages made sense for each network, such as returns, and UPS completed the reduction in 18 months. Tomé said it took about a year to bring her own board along with the plan and that she faced a massive amount of blowback from investors, but argued the long game was necessary rather than managing quarter by quarter. In the second quarter of this year, UPS returned to revenue, profit and operating margin growth.
United Parcel Service IncUPS's 18-month Amazon volume reduction restored revenue, profit and operating margin growth in Q2.
Amazon.com IncUPS cut the Amazon package volume it handles by 50%, but the article frames this as UPS's margin strategy and gives no clear read on Amazon's own business.
