What Could Go Wrong At UPS From Here?

Shares of United Parcel Service (UPS) have fallen 14.8% over the past three months, trailing the 3.8% gain for the S&P 500. The logistics company completed an 18-month plan to scale back its Amazon delivery work and target more profitable customers. That strategy operates as a bet that UPS can win those accounts. So who else is going after them?

FedEx Is Chasing More Profitable Work Too

FedEx competes with UPS for specialized services that earn more than standard e-commerce deliveries, Reuters reported, and Amazon may emerge as a rival as well. During its July 28 earnings call, UPS highlighted a focus on small and medium-sized businesses, health care shippers and deliveries between businesses. Analysts on that call questioned how UPS expects to gain market share when FedEx will likely target the same customer base.

Amazon represents the other potential competitor, even as it remains a UPS customer. Management noted in July that about 2 million Amazon packages a day have left the UPS network, yet the e-commerce giant still accounted for 9% of UPS’s revenue. On the same earnings call, analysts asked whether Amazon is now approaching UPS’s own customers directly to handle their shipping.

UPS is trying to win with specialized services. On September 29, UPS announced a deal with TikTok Shop. The agreement allows the shipping company to process returns that require no box and no label, Reuters reported.

Where Do Rivals Meet UPS?

This competition lands on the U.S. package business at UPS. That division brought in $59.5 billion in fiscal 2025, representing 67% of the company’s revenue and dropping 1.4% from the prior year.

The U.S. business is growing on price, not volume. In the second quarter of 2026, UPS delivered 3.3% fewer packages a day in the U.S. than a year earlier, mostly because of the planned Amazon cuts. Even so, U.S. revenue climbed 6%, as revenue per package increased 9.3%. Part of that climb came from base rates and a better customer mix, and the rest from fuel, management said. So UPS needs more revenue from each package to grow in the U.S., and rivals chasing the same customers could make higher prices harder to get.

The current share price leaves some room for bad news. UPS trades at 17.8 times earnings, against 21.9 for the S&P 500. The stock is also 17.7% below its 52-week high, so the price appears to assume some trouble already.

UPS Added Volume From Smaller Shippers In Q2

Smaller customers did ship more goods with UPS in the second quarter. Average daily volume from small and medium-sized businesses rose 4.3% from a year earlier. Management also stated in July that the company knew of no volume lost to Amazon.

For now, the competition remains a risk to monitor, not damage already done. Still, UPS forecast in July that its U.S. daily volume would fall by a mid-single-digit percentage in the third quarter. The company forecast U.S. revenue to stay about flat for that period, after the 6% rise in the second quarter. UPS has not yet reported that quarter. When it does, daily volume from small and medium-sized businesses will be the measure to watch.

Does This Mean You Should Act On UPS?

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