UPS Stopped Carrying 2 Million Amazon Packages a Day. Amazon Still Has to Move Them.

UPS completed its 18-month pullback from Amazon volume, shedding 2 million packages per day and cutting $4.5 billion in associated expenses. The shift forces AMZN to absorb the volume into its own logistics network, which now handles 6.7 billion U.S. parcels annually—making it the country's largest parcel carrier by volume.

The transition carries a steep cost. AMZN's shipping expenses jumped 19% to $27.9 billion in Q2, outpacing its 15% online sales growth for the same period. The gap signals the capital intensity required to maintain delivery speed and coverage without UPS capacity.

For UPS, the volume reduction represents a deliberate margin-preservation strategy, eliminating low-margin business to focus on higher-yielding commercial accounts. For AMZN, the internalization extends control over the customer experience but pressures operating leverage in the near term.

FDX remains the tertiary player in this rebalancing, potentially positioned to capture overflow volume as AMZN scales its network and UPS narrows its customer base.