The United Parcel Service (UPS) is reshaping its ecommerce strategy, reducing its reliance on Amazon deliveries while investing in services it aims at small online merchants, marketplace sellers and B2B ecommerce shippers.
The shift reflects broader structural changes in ecommerce logistics as large retailers expand their own delivery networks and parcel carriers reposition themselves around more profitable shipping segments.
UPS chief financial officer Brian Dykes said the company plans to remove about $5 billion in Amazon-related revenue and 2 million packages per day from its network over two years, representing about half of the ecommerce giant’s volume within UPS as of 2024.
“The portion of the volume that we’re exiting is really the vertically integrated retailer,” Dykes said during the Raymond James Institutional Investors Conference in early March. “That’s the volume that’s already sitting in a warehouse probably 50 miles from your house that Amazon can deliver themselves.”
UPS fulfills deliveries for online orders from more than 1,030 retailers in the Top 2000 Database. Those retailers combined for more than $826 billion in 2025 ecommerce sales, Digital Commerce 360 data shows. The database is Digital Commerce 360’s rankings and more of the largest online retailers in North America based on their annual ecommerce sales.
UPS shifts strategy away from Amazon toward Digital Access Program
Instead of competing with Amazon’s rapidly expanding internal logistics network, UPS is focusing its growth strategy on areas where its integrated air and ground delivery network provides greater value. Those areas include small and midsize ecommerce sellers, B2B shipments and specialized logistics markets such as health care.
“It’s not a shrink-the-company strategy,” Dykes said. “It’s a growth strategy in the places where we can drive accretive growth.”
A key part of that strategy is UPS’s Digital Access Program. It connects the company’s shipping services directly to ecommerce platforms and marketplaces used by small businesses. Through those integrations, merchants can access UPS shipping services directly within their ecommerce software rather than negotiating individual contracts with the carrier.
The program has expanded rapidly in recent years. Dykes said the Digital Access Program has grown from about $150 million in revenue six years ago to more than $4 billion last year, reflecting the surge in smaller merchants selling online through marketplaces and digital storefront platforms.
“This is not just Etsy stuff,” Dykes said. “This is also industrial retailers that are selling products online.”
The integrations allow sellers to generate shipping labels, access negotiated shipping rates and manage logistics workflows directly inside their ecommerce platforms. For UPS, the program broadens its access to thousands of smaller merchants rather than relying on large retail customers for a significant share of ecommerce shipments.
Why UPS is focusing on B2B ecommerce growth
At the same time, UPS is placing a greater emphasis on B2B ecommerce shipments, particularly in industrial supply chains and health care logistics. Compared with residential ecommerce deliveries, B2B shipments often involve higher-value products, commercial delivery addresses and more predictable shipping volumes.
Those characteristics can improve delivery efficiency and generate higher revenue per package for parcel carriers.
“Our focus is really on growing enterprise customers, particularly in B2B and health care and industrial verticals,” Dykes said.
Industrial ecommerce orders increasingly begin online and ship through parcel networks rather than traditional freight channels. Those orders include items such as replacement parts, tools and medical equipment. As distributors and manufacturers expand digital ordering capabilities, those shipments are becoming a larger part of parcel carrier networks.
To support the shift in its shipment mix, UPS is conducting what executives describe as the largest network reconfiguration in the company’s 118-year history.
UPS’ changes to its daily operations
In its January earnings release, UPS said it closed daily operations at 93 buildings during 2025 as part of its network restructuring. The company also reduced its operational workforce by about 48,000 positions, including seasonal roles.
UPS has announced plans to close another 24 buildings in early 2026 while evaluating additional capacity reductions as it reshapes its network around higher-value shipments.
Automation investments are central to that effort. By modernizing sorting facilities and consolidating operations, UPS aims to operate a smaller but more efficient network capable of handling growing ecommerce volumes with lower operating costs.
“We’ll have a more agile, more profitable network that we can grow off of,” Dykes said.
Global trade patterns are also influencing UPS’s ecommerce strategy. Dykes said shipments moving from China to the United States — historically one of UPS’s most profitable trade lanes — have declined by 30%.
However, overall trade flows have not collapsed. Instead, shipments are shifting to other regions as manufacturers diversify production and adjust to tariffs and geopolitical tensions.
“Trade has not stopped,” Dykes said. “Trade has just moved.”
UPS is adjusting its international logistics network to accommodate those evolving trade routes, including changes in cross-border ecommerce shipping.
UPS seeks rebound from recent revenue declines
The strategy shift comes as UPS works through a transitional period financially. The company reported $88.7 billion in revenue for 2025 and $8.5 billion in operating cash flow, according to its January earnings report.
For 2026, UPS expects about $89.7 billion in revenue, an adjusted operating margin of about 9.6%, and capital expenditures of $3 billion. The company also forecasts $6.5 billion in free cash flow for the year.
Despite the operational changes, UPS executives say maintaining service reliability remains central to its strategy. Dykes said UPS achieved its eighth consecutive year as the industry leader in peak-season delivery performance, even as it closed facilities and reshaped its network.
The changes highlight how parcel carriers are entering a new phase of ecommerce logistics. Over the past decade, carriers rapidly expanded networks to accommodate surging residential deliveries tied to online retail.
Now, as large retailers build their own delivery capabilities, carriers such as UPS are increasingly focusing on ecommerce segments where they can provide specialized logistics expertise and command higher margins.
For UPS, that means targeting marketplace sellers, cross-border ecommerce merchants, B2B ecommerce shipments and complex supply chains such as health care. The company’s evolving strategy reflects a logistics network designed less around high-volume consumer retail deliveries and more around the growing complexity of modern ecommerce supply chains.
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