UPS announces major cutback in Amazon relationship
UPS announced a seismic shift in the relationship with its largest customer, Amazon, prompting a sharp stock price drop Thursday morning.
The Georgia-based logistics company will cut the volume it moves for the retailer by more than 50% by the second half 2026, a move company leaders say reflects UPS’ new strategy, or as CFO Brian Dykes put it, “the largest network reconfiguration in our history.”
The news and the company’s resulting lower-than-expected revenue forecast for 2025 prompted its share price to drop to its lowest point since 2020 on Thursday morning.
UPS said it expects to bring in $89 billion in 2025 — below the average of analysts’ revenue estimate of $95 billion, and below 2024’s revenue of about $91 billion.
In a call Thursday, CEO Carol Tomé tried to assure analysts that the news is part of the company’s “better not bigger” strategy that will pay off in the years ahead.
“Amazon is our largest customer, but it is not our most profitable customer,” Tomé said. (It represented nearly 12% of UPS’ 2024 revenues.)
The retailer has been a UPS customer for 30 years, and they hold Amazon in “high regard,” she said.
But when it came time to renegotiate the contract, UPS decided it was time to “rightsize” the network. “This was UPS taking control of our destiny,” she said.
The expected drop in Amazon volume is five times faster than the drop UPS has already seen in Amazon volume since 2021, and company leaders say it will free up resources to shift focus to other more profitable businesses.
Amazon, which has been building out its own logistics network, delivered more packages than UPS in 2022.
Average rate on 30-year mortgage eases for second week in as row, but remains just below 7%
The average rate on a 30-year mortgage in the U.S. eased for the second week in a row, but remains just below 7%, little relief for prospective home shoppers looking ahead to the spring homebuying season.
The rate fell to 6.95% from 6.96% the week before, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.63%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, also eased this week. The average rate dropped to 6.12% from 6.16%. A year ago, it averaged 5.94%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. The average rate on a 30-year mortgage briefly fell to a 2-year low just above 6% last September, but has been mostly rising since then, echoing a sharp rise in the 10-year Treasury yield, which lenders use as a guide for pricing home loans.
