UPS cuts Amazon volume as part of “better, not bigger” policy

UPS reported better-than-expected profits in its quarterly earnings report, even though volume in its domestic unit was down 4%.

The drop was partially due to a maximum volume agreement with Amazon, as part of UPS’ “better, not bigger” strategy, which focuses on shipments with higher financial returns.

“So they've got a lot of volume to deliver. But we've contractually agreed on what makes sense for us versus what makes sense for them,” CEO Carol Tome said on the earnings call.

“That means that both volume and revenue for Amazon is coming down. We project by the end of this year that Amazon revenue will be less than 11% of our total revenue.”

UPS has turned its attention to small-to-medium businesses and B2B shipments.

Amazon, however, remains its biggest customer and UPS still delivers millions of Amazon parcels.

Source: Reuters, UPS