UPS to reduce Amazon shipments by 50%

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and why UPS is slashing its Amazon shipments by 50%.

Transcript

00:00I'm Conway Giddens reporting from the New York Stock Exchange, here's what we're watching

00:03on the street today.

00:05One day after the Federal Reserve held interest rates steady, data released on Thursday shows

00:09the economy ended the year without any sign of recession.

00:13The U.S. economy grew 2.8 percent for all of 2024, compared to 2.9 percent the year

00:19before.

00:20Meanwhile, applications for new jobless benefits saw a bigger-than-expected drop last week.

00:25Looking at the calendar, the Fed's preferred inflation gauge, known as the PCE, is released

00:30on Friday.

00:31ExxonMobil and Chevron post their quarterly results as well.

00:36In corporate headlines, UPS is at the point of its relationship with Amazon where it's

00:39ready for that awkward conversation that ends with the phrase, I think we should see other

00:45people.

00:46UPS announced that it will slash Amazon package deliveries by 50 percent by the latter half

00:51of 2026.

00:53The turn in the relationship between UPS, the world's biggest package shipper, and Amazon,

00:57the world's largest e-commerce company, comes as UPS feels the heat from the sheer number

01:02of packages it ships for Amazon.

01:05Because of a large volume pricing structure put in place, UPS doesn't make as much money

01:10on each Amazon package shipped compared to what it makes on other deliveries.

01:15UPS CEO Carol Tomei put it bluntly on a call with investors, quote, Amazon is our largest

01:21customer, but it is not our most profitable customer.

01:25You may not know this when you sit down to make a purchase on Amazon or any other website

01:30for that matter, but for UPS, there's a high cost to free or low cost shipping offered

01:35to you.

01:36In 2024, the company took in $92 billion in shipping fees.

01:41Even with the Amazon changes, UPS predicts that number will drop in 2025.

01:47That'll do it for your daily briefing from the New York Stock Exchange.

01:50I'm Conway Gittins with The Street.

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