In the parcel market, UPS has recently made major changes to their sources of package volumes.
Here’s an overview of what has changed:
UPS Insourcing SurePost
UPS SurePost is an economy service for residential packages under 9 pounds. Previously, USPS made the final mile delivery.
- On December 31, 2024 the UPS and USPS Negotiated Service Agreement (NSA) expired without renewal
- UPS has insourced SurePost and is delivering via their own drivers
- Same transit time now as UPS Ground, at a higher cost
- The 2025 UPS GRI for SurePost was 9.9% with a minimum charge of $12.28
- Delivery Area Surcharges for SurePost now match UPS Ground
- DAS: 61% Increase
- EDAS: 69% Increase
- UPS may potentially rebrand or discontinue SurePost service
UPS Reducing Amazon Volume
Another major volume change taking place at UPS is the reduction in volumes from Amazon.
- UPS Cutting half of Amazon volume over the next 18 months
- Amazon accounts for about 11.8% of UPS’s revenue
- UPS has communicated that they don’t intend to further reduce Amazons volumes in the future due to their reliance on The UPS Store locations for customer returns
We wouldn’t be surprised to see strategic changes ahead at FedEx as they complete the FedEx Freight spin-off within the next 17 months.