The News
UPS earned 6.1% more per US package in Q3 2026 than a year earlier, even as its daily volume fell 3.3%, the company reported. It was the first full quarter since UPS finished cutting volume from Amazon, its largest customer.
About half of the 6.1% came from higher base rates and a better customer mix. Higher fuel surcharges made up the rest, CFO Brian Dykes said on the earnings call.
US daily volume fell to 15.6 million packages from 16.2 million. Without Amazon, volume grew nearly 2%, or about 200,000 packages a day, Dykes said.
The details
Base rates and mix will keep rising, UPS says. Dykes said they add 200 to 300 basis points to revenue per package and will continue “no matter how fuel moves around.”
He said UPS’s 2027 rate increase is “consistent with prior years.”
Revenue per package grew 60 basis points faster than cost per package, Dykes said. That puts UPS’s cost per package up about 5.5%, by our math.
CEO Carol Tomé called pricing among carriers “very rational.”
UPS is adding volume from small businesses and B2B shippers. Dykes called that shift deliberate, toward “more premium volume.”
Small and mid-size businesses grew their daily volume 3.7%. They now make up a record 35.1% of UPS’s US volume.
Healthcare, high tech, manufacturing and automotive customers are a growing share, Dykes said.
Tomé said Amazon Shipping has had no “measurable or meaningful impact” on UPS. “Our networks are just different. They have a linear network. We provide reverse logistics. Their ground offer is two to five days reliable delivery. We have ground guarantees,” she said.
Peak will run with less volume and less rented capacity than last year. UPS expects its US daily package volume to rise about 25% from Q3 to Q4, the same jump as last year. Q4 volume would still be 1.3% lower than a year ago, Dykes said.
“A little over 100 US customers account for approximately 80% of our peak surge,” Tomé said. UPS based its 25% estimate on those customers’ forecasts, she said.
UPS is renting fewer trailers and leasing fewer aircraft this peak, Dykes said.
UPS plans 100,000 seasonal hires, according to Supply Chain Dive. Nearly 70% of packages will be sorted by automated systems at peak, Tomé said.
UPS’s network rebuild is mostly done. Dykes said UPS has finished closing and restructuring the buildings it planned to.
About 1,500 drivers took a buyout in Q3.
UPS has booked $1.8 billion of the nearly $3 billion in savings it targets this year.
A new Protected Delivery option, which releases a package only with the recipient’s PIN, costs $10.70 a shipment from mid-November.
My notes
Cheaper diesel won’t undo this increase. Only half of the 6.1% is fuel. UPS says the other half, from base rates and customer mix, keeps growing whatever fuel does.
UPS dropped Amazon packages to earn more per package. UPS finished its planned Amazon cuts in Q2. Dykes called the volume UPS let go “difficult volume” and said UPS wants “more premium volume” from small businesses, healthcare and B2B shippers.
UPS built this peak around its 100 biggest customers. UPS expects its US daily package volume to rise about 25% from Q3 to Q4, the same jump as last year. Tomé said a little over 100 customers make up about 80% of that jump. UPS based its peak estimate on those customers’ own forecasts.
Why Tomé isn’t worried about Amazon Shipping. She points to ground guarantees, returns and a network built differently from Amazon’s two-to-five-day ground.
What’s next
Protected Delivery launches Nov 16. UPS’s 2027 rates take effect Dec 21.
(Photo: USDA)
