Amazon is leaving UPS as a customer and arriving as a competitor

What happened

Pitney Bowes’ Parcel Shipping Index put U.S. parcel volume at 23.1 billion shipments, up 3.3%, with Amazon Logistics the largest carrier by volume. UPS’s revenue share fell to 31.6% from 34.3%, while smaller carriers doubled their share to 7.2%. Then, on May 4, 2026, Amazon launched Amazon Supply Chain Services, opening its network — more than 100 cargo planes and 80,000 trailers — to outside businesses.

Why it matters

UPS is already gliding down Amazon, which was 10.6% of its 2025 revenue at the lowest yield per piece. The plan depends on replacing that density with SMB, B2B, and healthcare shippers. Those are exactly the customers Amazon can now sell to directly. The departing customer becomes a competitor for the replacement volume.

My read

That is why my UPS model treats “Amazon as competitor” as its own scenario (about $76 a share, 10% probability) rather than just a harsher version of weak execution. The two fail differently: weak replacement is an execution problem UPS can manage; Amazon winning third-party volume is a market-structure problem it can only respond to. The trigger I would watch is UPS’s domestic share — below about 31%, the right response is to double down on B2B and healthcare, where contract depth and service quality are harder to copy.

Sources: Pitney Bowes Parcel Shipping Index; UPS 2025 Form 10-K; Amazon Supply Chain Services launch (May 2026).