UPS Delivers Gains, But Amazon Drops the Package

Snack-Sized Version:

UPS’s latest earnings call paints a picture of resilience amid chaos, with notable wins offset by external headwinds and a moody Amazon. UPS saw its U.S. operating profit rise by $164 million, and margins expanded by 110 basis points, showing domestic strength. International growth impressed too, with export volume jumping 9.3%, thanks to powerhouse performances in Asia and Europe. Digital efforts gained traction, attracting more small and medium businesses to the party. However, a 0.7% revenue drop, exacerbated by a 16% decline in Amazon volumes, kept celebrations muted. Trade policy uncertainties and economic wobbles continue to complicate planning. UPS is slashing costs with a network reconfiguration that includes closing 73 facilities and expects to trim $3.5 billion by 2025. Despite these clouds, UPS is optimistic, forecasting a 9.3% domestic margin next quarter and eyeing a major Amazon volume cut by 2026. It’s a mixed bag—one part logistics flex, one part global stress.

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Read the Full Meal:

UPS’s Q1 2025 earnings call presented a story of contrasts—strategic wins on one hand, sobering losses on the other. The company’s U.S. domestic segment led the way with a $164 million year-over-year operating profit increase. Efficiency improvements drove the operating margin up by 110 basis points. International performance also gave the bulls something to cheer about, with a 7.1% rise in average daily volume and a 9.3% surge in exports, largely from Asia and Europe.

Not to be outdone, the Digital Access Program flexed its growing muscle, posting a 24% global revenue jump. This initiative also deepened UPS’s reach with small and medium-sized businesses in the U.S. The strategic acquisition of Andlauer Healthcare Group is set to enhance the company’s foothold in Canada’s healthcare logistics sector. And behind the scenes, UPS is undertaking its biggest network reconfiguration ever—closing 73 buildings to save a whopping $3.5 billion by 2025.

Still, not everything fit snugly in the brown box. Consolidated revenue dipped 0.7% to $21.5 billion. The culprit? Sluggish global trade, muted enterprise demand, and a 16% nosedive in Amazon’s daily volume. That last one particularly stung, hitting both air and ground operations hard. The company’s international operating profit dropped by 4.1%, and the Supply Chain Solutions segment didn’t help matters, seeing a $471 million slide due to divestitures and rising costs.

Looking forward, UPS aims to pivot aggressively. It plans to slash Amazon volume by over 50% by 2026 and will roll out a new “Ground Saver” service to chase more cost-conscious customers. With its eyes set on a 9.3% domestic margin for Q2, UPS remains hopeful despite global policy fog. In the world of logistics, adapting fast is the only way to stay on track—and UPS seems ready to navigate with GPS precision, even if a few roads are still under construction.