UPS Q4 2024: Navigating Amazon Volume Declines and Network Optimization Challenges

These are the key contradictions discussed in United Parcel Service's latest 2024Q4 earnings call, specifically including: Amazon volume decline impact and network adjustments, SurePost contract and onboarding, Amazon revenue and volume impact, network optimization, and volume outlook:



Revenue and Profit Growth:
- UPS reported revenue growth in Q4 2024, with consolidated revenue increasing by 1.5% to $25.3 billion, and operating profit growing 11.2% to $3.1 billion.
- The growth was driven by gains in revenue quality and strong cost management.

Strategic Changes and Volume Reduction:
- UPS announced an agreement in principle with its largest customer to reduce volume by more than 50% by the second half of 2026.
- This reduction is aimed at improving customer mix, focusing on revenue quality, and driving profitability improvements.

SurePost Insourcing and Cost Management:
- UPS will insource all SurePost volume, previously handled by the USPS, starting January 1, 2025, following a 9.9% average rate increase.
- This change was driven by concerns over service quality and cost increases associated with the USPS's operating model.

International Segment Performance:
- The international segment experienced positive average daily volume growth for the first time in three years, up 8.8% year-over-year, with strong performance in Asia and Mexico.
- Growth was supported by strong performance in Canada and increased demand across export regions.