The News
A little over 100 US customers account for about 80% of UPS’s holiday peak surge, CEO Carol Tomé said on the company’s Q3 2026 earnings call.
“A little over 100 US customers account for approximately 80% of our peak surge,” Tomé said. “Based on their forecasts, we expect average daily volume to increase approximately 25% from the third quarter to the fourth quarter.”
Small and mid-size businesses made up a record 35.1% of UPS’s US volume in Q3. Their daily volume rose 3.7% from a year earlier, CFO Brian Dykes said.
The details
Tomé and Dykes said UPS’s fourth-quarter volume outlook comes from those customers’ own forecasts. UPS expects the same jump from Q3 to Q4 as last year.
Dykes referred to “the forecast we have from our largest customers.”
“That sequential increase is consistent with last year,” Tomé said.
This year’s peak will be smaller because UPS cut Amazon volume earlier in the year. UPS’s total US volume is shrinking, but without Amazon it is growing.
US daily volume fell 3.3% in Q3 from a year earlier, Dykes said.
“So total ADV will be down just slightly in the fourth quarter,” Tomé said. “But if you back out Amazon, it’s growing.”
Tomé tied the drop to “the deliberate actions we took earlier in the year to reduce Amazon volume.”
UPS is adding less extra capacity for the smaller peak. Dykes said UPS is renting fewer trailers, leasing fewer planes and hiring fewer seasonal workers.
“It means that we are renting less trailers, we’re leasing less aircraft,” Dykes said.
“While we’re hiring, we’re not having to hire and train as many people in such a short time period,” he said.
“We’ll add variable capacity where needed,” Tomé said.
Small and mid-size businesses are the part of UPS’s US business that is growing. UPS also earned more on each US package it carried in Q3.
Tomé credited the small business growth to UPS’s Digital Access Program, which sells UPS shipping through online selling platforms.
US revenue per piece rose 6.1% from a year earlier. About half of that came from higher base rates and a better customer mix, Dykes said.
UPS’s 2027 rates rise an average of 5.9% on Dec 21, UPS said. It is also adding a surge fee on some Ground packages, based on the ZIP code they ship from.
The fee covers “domestic Ground and Ground Saver shipments from certain ZIP codes for Qualified customers,” according to UPS’s 2027 rates page.
“Details on these fees, including the applicable origin zip codes, will be available in early November,” UPS said.
My notes
Shippers outside the top 100 get the space left over. UPS sizes its peak network from about 100 customers’ forecasts. Everyone else ships in the room that plan leaves.
UPS has less backup capacity this peak. It is renting fewer trailers and leasing fewer planes. If big shippers send more than they forecast, there is less room for everyone else.
Some warehouses will cost more to ship from than others. UPS’s new surge fee depends on the ZIP code a package ships from. UPS names those ZIP codes in early November.
What’s next
UPS names the origin ZIP codes for its new surge fee in early November. Its 5.9% average rate increase takes effect Dec 21.
