With Two Major Partnerships Ending, UPS is Set to Roil E-Commerce Logistics
Big changes are rocking the shipping world, and if you run an e-commerce business, you’re going to feel it. UPS announced the end to two primary partnerships - USPS and Amazon - and it's going to create waves throughout US e-commerce.
With the end of the United States Postal Service's long-standing consolidator relationship, the UPS SurePost product will face major changes. At the same time, in a surprise announcement, UPS said it would be accelerating plans to sever ties with Amazon. These shifts are more than just corporate strategy—they’re going to impact costs, capacity, and the way businesses move products to customers.
USPS and Its Consolidator Breakup: What’s Changing?
For years, USPS has worked with consolidators—third parties that bulk ship packages before handing them over to USPS for final delivery. This has been the backbone of the UPS economy SurePost offering, which has been a cost effective delivery method for sub-1lb shipments. But changes at USPS under Postmaster DeJoy means UPS now handles 100% of SurePost volumes in-house, which could mean higher shipping costs. While the Postmaster has commented that his sales force is "on fire," the fact is that USPS isn't set up to negotiate the types of relationships that have been previously managed by its consolidator network.
UPS and Amazon: The Breakup That’s Reshaping Shipping
UPS has been weaning itself off Amazon for a while, but now the split is accelerating. The Wall Street Journal reported that Amazon’s share of UPS’ revenue has dropped from 13.3% in 2020 to just 7.4% in 2023. Why? UPS is pivoting away from high-volume, low-margin shipments in favor of serving small and mid-sized businesses that generate better profits.
And here’s the kicker—UPS is also thinning out its workforce, meaning there’s going to be less capacity, fewer delivery drivers, and most likely, rising costs and new surcharges for e-commerce businesses.
What This Means for E-commerce Sellers
The combination of these two breakups is going to send ripple effects throughout the shipping world. Here’s what businesses need to prepare for:
-
Higher Shipping Costs: With USPS consolidator discounts disappearing and UPS tightening capacity, expect shipping rates to rise across the board.
-
Capacity Constraints: Fewer drivers at UPS and shifting volume at USPS mean potential delivery delays, especially during peak seasons.
-
Surcharges and Service Changes: Both carriers will be looking for ways to maintain profitability, so expect new fees, peak surcharges, and potential service adjustments.
-
Less Flexibility in Carrier Relationships: Businesses relying on SurePost or Amazon Logistics need to explore new options to avoid getting caught off guard by these changes.
Adapting to the New Logistics Reality
Change is inevitable, but that doesn’t mean you have to be caught off guard. Here’s how to stay ahead of the game:
-
Rethink Your Carrier Mix – If you’ve been heavily relying on UPS or USPS consolidators, now’s the time to explore FedEx, DHL, regional carriers, or even third-party logistics providers.
-
Watch Costs Closely – Shipping rates and surcharges are moving targets. Keep a close eye on price changes and don’t be afraid to renegotiate contracts.
-
Invest in Smart Shipping Tech – Tools that help optimize carrier selection, automate rate shopping, and streamline fulfillment can save money and improve delivery performance.
-
Stay Agile and Informed – This isn’t the last shakeup in the logistics world. Keep an eye on carrier announcements and adapt quickly to changes.
Looking Ahead
USPS and UPS are making big moves that will ripple through the e-commerce supply chain. Coupled with tariffs on China, the elimination of the de minimus exception, and potential tariffs on Mexico, Canada and the EU, 2025 promises to be the most significant year since the pandemic in changing how e-commerce businesses operate. Looking forward, the only certainty is that businesses must retain flexibility to adapt to the changing landscape.
At Gooten, we’ve seen how supply chain adaptability makes all the difference in scaling an e-commerce operation. By staying on top of industry shifts and keeping options open, businesses can turn these disruptions into strategic advantages.
How is your business adjusting to these changes? Drop a comment and let’s talk about it!
Media Contact
Company Name: Gooten
Contact Person: Brian Rainey
Email: Send Email
Address:228 Park Ave South
City: New York City
State: New York
Country: United States
Website: https://www.gooten.com/
