What it does
United Parcel Service, Inc. (UPS) is a package delivery and logistics company founded in 1907, headquartered in Sandy Springs, and led by Chief Executive Officer Carol Tomé. It serves shipping customers that need to move documents, parcels, palletized freight and other goods, as well as businesses that need logistics, distribution, customs and returns support.
UPS operates an integrated air-and-ground transportation network. Its global small-package operations offer time-definite delivery for express letters, documents, packages and palletized freight, including air, ground, domestic and international services. The U.S. ground network reaches substantially all business and residential ZIP codes in the contiguous U.S.; Ground Saver serves non-urgent, lightweight residential shipments.
Beyond parcel delivery, Supply Chain Solutions provides airfreight and ocean-freight forwarding, customs brokerage, contract logistics, fulfillment and transportation management. Its healthcare operations handle specialized supply chains, including cold-chain and thermal-monitoring needs. Roadie provides same-day delivery for packages that do not fit the small-package network, while Happy Returns provides returns services.
UPS served over 200 countries and territories. In 2025, it delivered an average of 20.8 million packages a day, or 5.2 billion packages for the year. It had 460,000 employees excluding temporary seasonal employees.
How it makes money
UPS earns transportation revenue when customers ship through its package network, and service revenue from freight forwarding, logistics, customs brokerage, insurance, returns and digital services. Its two reportable segments are U.S. Domestic Package and International Package; their combined operations are global small package. Supply Chain Solutions contains its Forwarding, Logistics, digital and other businesses.
U.S. Domestic Package sells air and ground delivery alternatives, ranging from same-day to three-day delivery, plus air cargo. International Package sells guaranteed day- and time-definite cross-border delivery, deferred services, cross-border ground delivery and urgent palletized freight. These businesses charge for transport and can also generate revenue from service level, shipment characteristics, customer mix and fuel-related rates. In the third quarter of 2026, U.S. Domestic revenue per piece increased 6.1% from a year earlier, with higher fuel rates contributing to that increase.
Supply Chain Solutions earns fees for arranging air and ocean transport, managing inventory and distribution facilities, fulfilling orders, clearing customs and providing specialized healthcare logistics. Digital Access Program embeds UPS shipping tools in e-commerce platforms, extending access to small and medium-sized businesses. Returns, insurance and same-day delivery provide additional services that can feed packages into the network.
Total revenue was $88.7 billion in 2025; consolidated revenue was $22.9 billion in the third quarter of 2026. The company expects consolidated revenue of approximately $92.6 billion and consolidated operating profit of approximately $8.75 billion for full-year 2026.
Customers and how it sells
UPS served 1.6 million shipping customers and more than 10.7 million delivery recipients daily in 2025. Its target customer groups include healthcare, business-to-business customers, small- and medium-sized businesses, e-commerce merchants, manufacturers, high-tech businesses, automotive customers and consumers receiving deliveries.
Amazon.com, Inc. and its affiliates represented 10.6% of consolidated revenue in 2025, substantially all within U.S. Domestic Package. UPS has been reducing the volume it handles for Amazon, with a targeted reduction of more than 50% by June 2026 from 2024 levels. In the third quarter of 2026, SMBs, including platforms, represented 35.1% of total U.S. volume.
Customers can ship through direct driver pickup, UPS Access Points, The UPS Store network and drop boxes. Digital Access Program places UPS shipping capabilities in e-commerce platforms; it gives the company access to over 8 million SMBs. Approximately 10% of total U.S. small-package volume originates through The UPS Store network.
The company operates across more than 200 countries and territories. Its air network centers on Louisville, Kentucky, with international hubs in Germany, China, Hong Kong, Canada and Florida. It opened an air hub at Clark International Airport in the Philippines in October 2026.
Suppliers and costs
UPS runs a physical transport network that requires aircraft, vehicles, facilities, sortation equipment, technology and fuel. Fuel and energy costs are significant because the company needs gasoline, diesel and jet fuel for delivery vehicles and aircraft. It uses pricing strategies and may use hedging transactions to mitigate changes in fuel prices; it cannot assure that these measures will offset the effect of higher fuel costs.
Labor is also a major operating input. UPS had 460,000 employees excluding temporary seasonal employees, including approximately 385,000 hourly employees. Nearly 80% of U.S. employees are represented by unions, primarily the Teamsters. The national master agreement with the Teamsters expires on July 31, 2028.
The company also relies on internally developed systems, third-party technology systems, cloud service providers and third-party delivery service providers. Its December 2025 agreement with the United States Postal Service supports final-mile delivery for part of Ground Saver and Mail Innovations volume beginning in 2026. UPS expects this arrangement to serve those offerings more cost efficiently while maintaining service levels.
- Revenue$88.7B
- Cost of revenue−$18.0B
- Selling, general and administrative−$48.6B
- Other operating costs−$14.2B
- Operating income$7.9B
Competitive position
UPS competes with local, regional, national and international logistics providers, national postal services, motor carriers, express companies, freight forwarders, air couriers, transportation companies, e-commerce companies, retailers, start-ups and crowdsourced delivery providers. Competition spans parcel delivery, air and ground transport, forwarding, logistics, returns and technology-enabled delivery services.
Amazon is both a UPS customer and a competitor. UPS stated that Amazon Shipping had not had a measurable or meaningful impact on its business since Amazon’s summer 2026 announcement. Competition also includes companies that may operate with different cost, operational and organizational structures, and may offer prices or services UPS does not offer.
UPS’s stated competitive capabilities include its integrated air-and-ground network, global presence, package visibility systems, digital tools, broad portfolio, access points, customer relationships, service operations and healthcare logistics capabilities. RFID technology is part of its effort to move from scanning to sensing; it delivered 1,900,000 packages per day without scanning them through RFID technology in the third quarter of 2026.
Our reading: The integrated network is a strong moat source because it supports air, ground, domestic, international, commercial and residential services through one pickup-and-delivery network.
Our reading: Network access points, customer integrations and RFID-based visibility are moderate moat sources because they can embed UPS in customer workflows and improve operational efficiency, but competitors can also invest in logistics technology.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Amazon.com, Inc. | package delivery and logistics services | Medium |
Growth opportunities
UPS is focusing growth efforts on healthcare, business-to-business customers, SMBs and international shipping. It is seeking more premium volume and a mix of customers and products that use its end-to-end transport and logistics capabilities. The company sizes its addressable market from manufacturing floor to front door at $922.0 billion, including a $535.0 billion premium opportunity and a $150.0 billion U.S. premium opportunity.
Healthcare is a central growth area. The company generated more than $11 billion from its global healthcare portfolio in 2025 and acquired Frigo-Trans and Andlauer Healthcare Group that year to expand cold-chain capabilities. Healthcare revenue exceeded $3.0 billion for the third consecutive quarter in the third quarter of 2026. The company says complex healthcare logistics is projected to grow around 6.00% annually.
Digital Access Program extends UPS shipping tools to e-commerce platforms and SMBs. Global DAP revenue reached $1.4 billion in the third quarter of 2026, while air services and ground commercial represented nearly 30.0% of DAP volume. The company also identifies data-center logistics opportunities of $15.0 billion.
Network automation is intended to support productivity and service quality. By the end of 2026, UPS expects more than 4 billion RFID-enabled packages to have been delivered. It expects nearly 70% of packages to move through an automated process during the 2026 peak season.
- $97.3BFY2021
- $100.3BFY2022
- $91.0BFY2023
- $91.1BFY2024
- $88.7BFY2025
- $92.6BFY2026 guidance
Structural risks
-
General economic conditions, consumer spending, industrial production, inflation, international trade policies and geopolitical developments can reduce shipping demand or make the business model difficult to adjust.
-
UPS faces substantial competition from logistics providers, postal services, transport companies, e-commerce companies, retailers, start-ups and crowdsourced delivery providers. Competitors may offer pricing or services that UPS does not match.
-
The planned reduction in Amazon volume requires reductions in facilities, vehicles, aircraft and workforce. If UPS cannot adjust its assets or control related costs, profitability could be materially affected.
-
The business depends on hiring, training and retaining a large workforce. Labor costs are affected by collective-bargaining obligations, turnover, benefits, inflation and market conditions; strikes, work stoppages or slowdowns could interrupt service.
-
UPS depends on information technology to receive package data, move and track packages, plan deliveries, bill customers and manage employee information. Cybersecurity incidents, AI-related vulnerabilities, third-party system failures and data-protection requirements could disrupt operations or create liability.
-
Fuel-price changes and supply interruptions can raise costs. Higher fuel surcharges can cause customers to shift to lower-yielding services or reduce shipment volumes.
Bottom line
Our reading
Our reading: UPS is a network-based transport and logistics business whose package operations are supplemented by forwarding, contract logistics, returns, insurance and specialized healthcare services. Its operating model depends on the utilization and productivity of a global air-and-ground network, a large workforce and technology systems. The deliberate reduction of Amazon volume, network reconfiguration and a shift toward SMB, healthcare and premium business are central to its current operating change. Competition, labor, fuel, trade-policy and technology risks remain material because they can affect volume, cost and service execution.