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Posted on 04/29/2025 7:55:57 AM PDT by DFG
UPS will cut 20,000 jobs this year after breaking with its biggest customer Amazon.
The delivery giant is looking to slash costs after its decision in January to halve the number of Amazon deliveries it takes.
Deliveries for the e-commerce giant makes up around 12 percent of UPS's revenue, the company said.
However, UPS said the profit margins for Amazon deliveries were too small and it wanted to refocus on more lucrative markets such as healthcare and international deliveries.
The decision will also lead to the closure of 73 UPS buildings this year, the company said on Tuesday.
UPS CEO Carol Tomé argued that the chance to reduce costs and reorganize its network was also timely given the uncertain economic environment.
'The world has not been faced with such enormous potential impacts to trade in more than 100 years,' Tomé said on the company's earnings call on Tuesday.
It comes after UPS cut 12,000 jobs and closed 11 buildings last year.
The company currently has 490,000 employees, around 330,000 of which are represented by the Teamsters union.
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Amazon will pull more of those deliveries in-house using a system analogous to Uber.
Lots of small businesses are springing up in different locations to deliver for Amazon. I have an extended family member that does this and hires help to run a handful of delivery vans.
The world benefited from offshoring and gutting US industry. The USA and it's workers NOT SO MUCH.
I get uber type independent deliveries in private cars from Amazon and Walmart. I struggle to understand the economics of that.
I have noticed more and more that items I order don’t ever make it to my home- they “get lost in transit” lately. For many years I never had one get lost- now its kind of a crap shoot and we have to wonder if an order will reach us or not. I’m guessing there is a lot of theft going on- criminals robbing delivery trucks, tractor trailers hau,ing goods etc. Maybe even within the packing and shipping plants themselves. Criminals are getting pretty bold- some will block a delivery truck in and rob it right in traffic.
Yep, same here. Seems it would really increase shipping costs to do that
Lots of deliveries in my neighborhood of 20 homes.
Five years ago, you would see UPS and Fed Ex trucks.
No more, they are very rare.
Mostly Amazon marked trucks, some Post Office deliveries, and unmarked trucks and rental trucks delivering mostly Amazon.
If a person is already making a trip in that direction, the marginal profit of pickups and several stops along the way is worth the marginal cost. The total cash outlay for delivery is consequently lower than a dedicated vehicle and driver. Effectively, the pickup and delivery stop itself is the total cost to the shipper. They don't have to pay for the driving except for the fraction that is out of their way.
UPS shoulders the cost of maintaining their delivery trucks and employees. An Uber style delivery dumps those costs on the "gig" worker. My son does some Amazon deliveries. Guess who gets stuck for the vehicle maintenance expenses? I do. That's coming to a screeching halt as I deal with a layoff notice.
UPS lost our small business shipping a month ago. They deactivated my 25 yr old account for no specific reason. Spent an hour and a half on the phone with at least 7 UPS employees....none of whom seemed to be in the USA, to no avail. Said they reactivated it. I said Goodbye, opened a new FedEx account and all is well. I choose to reject poor customer service from folks .. especially folks whose first language is not English.
These drivers work as independent contractors. Thus, Amazon avoids FICA and Medicare taxes as well as workers comp. Amazon also doesn’t have to maintain the vehicles or pay for auto insurance. Monster savings there.
Me too. I guess it is no health insurance, vehicle insurance and maintenance or other benefits and at will contractor employment.
For rural areas, and I mean in the middle of nowhere, USPS is one answer, and so are UPS and FedEx. But NOT independent drivers such as uber or whatever.
There is no way anyone can profit by picking up a lonely Amazon package at the Amazon building in Bismarck, ND and drive it all the way to Crosby, ND with maybe one or two deliveries in between.
My understanding is USPS gives Amazon special rates. I suspect Amazon will have to pay standard rates for whatever other businesses pay in order to get a package delivered on time.
Amazon has extremely bad management at this point.
We have major issues with USPS.
We won’t touch retailers who use USPS anymore.
Never had a problem with UPS or FedEx.
There are a lot of small businesses that act as subcontractors for Amazon. They invest in the blue trucks and paint a yellow penis looking logo on the side. Amazon provides software and inventory to be delivered. I believe the trucks go to the Amazon depot to get loaded up. There’s an Amazon warehouse in the industrial park and in the AM you can watch 100 of them drive on by, and in the late afternoon they take all the stalls at one of the local gas stations.
UPS actually pays a decent wage (compared to Amazon) to it’s drivers and workers. Some of them even get pensions.
The excess load that Amazon caused UPS was hurting their services, but they weren’t getting commensurate compensation for that level of increased demand.
The move makes sense.
Amazon will have to try to increase their own delivery services or sub it out to contractors. How well those employees and contractors are paid/supported I do not know.
UPS is a union Teamsters operation and are the highest paid with the strictest rules. This is about money...
I will miss the professionalism of the UPS drivers.
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