UPS Outsources Weather Forecasts to Cut Costs, Streamlines Operations

UPS has outsourced its weather-forecasting operations to Weather Co. to cut costs and streamline its business. The company made the switch earlier this year. UPS has also plans to offload some tech support and investment office functions.

United Parcel Service (UPS) has made significant moves to cut costs and streamline its operations by outsourcing its proprietary weather-forecasting operations to The Weather Company, the owner of the Weather Channel. This decision comes amidst broader cost-cutting efforts and strategic shifts aimed at addressing weak parcel volume and slumping shares [1].

UPS, which ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, has relied on its own meteorologists to direct logistics operations. However, the company has now transitioned this function to The Weather Company, effective earlier this year. This move is part of a broader strategy to reduce expenses and improve operational efficiency [2].

In addition to weather forecasting, UPS has also shifted its technology support functions to third-party tech vendors. Last year, the company outsourced its chief investment officer functions to Goldman Sachs Group Inc. for certain pension portfolios. These changes underscore the company's efforts to slim down some corporate functions under the leadership of CEO Carol Tomé [3].

The company plans to excise half of its unprofitable Amazon business by the middle of next year, further reorienting its network by consolidating and automating facilities, and reducing headcount. UPS aims to trim its operational workforce by 20,000 to accommodate lower volumes [1].

While these changes may impact UPS's operational structure, they reflect a strategic response to market conditions. The company's shares have dropped 31% this year through Tuesday, compared to a 10% increase in the S&P 500. UPS's in-house weather-forecasting team, once considered a strategic advantage, is now outsourced, highlighting the company's focus on cost efficiency [2].

References:
[1] https://www.ttnews.com/articles/ups-outsources-weather
[2] https://www.bloomberg.com/news/articles/2025-08-27/ups-outsources-forecasting-operation-to-weather-channel-owner
[3] https://www.spokesman.com/stories/2025/aug/27/ups-outsources-forecasting-operation-to-weather-ch/