UPS has opened a formal consultation on outsourcing its UK last-mile delivery to third-party contractors, a move the Unite union says could affect more than 3,000 delivery jobs. No decision has been made. UPS says it is reviewing options, but the plan under discussion would shift delivery from directly employed drivers to a contractor fleet model.
How it works: UPS is weighing an Amazon-style Delivery Service Partner setup, according to a source familiar with the company’s plans cited by FreightWaves. Under this model, UPS would hand last-mile delivery to third-party firms that own their own vans and hire local drivers, rather than employing the drivers itself. This is a contractor fleet model, not app-based gig work.
“We constantly review how we can enhance customer experience and improve efficiency… we are evaluating options for our business in the UK,” UPS said. The company has not confirmed any job numbers, sites or timeline.
What the union says: Unite says the proposal would shrink the number of directly employed drivers from 4,000 to 800 across 51 sites. General Secretary Sharon Graham called it “an incredibly wealthy company trying to cynically further boost its profits by casualising its delivery service” and warned that “all avenues including industrial action will be actively pursued.” Three unions are part of the consultation including Unite, RMT, and URTU.
Why now: Unionized UPS drivers cost about $65 an hour, according to parcel analyst Satish Jindel of ShipMatrix, making low-weight business-to-consumer deliveries difficult to run profitably. UPS’s international operating profit fell about $94 million year over year in Q1 to $547 million. The company is also restructuring through its Network Reconfiguration and Efficiency Reimagined program, which targets roughly $3 billion in savings in 2026.
The pattern: Contractor fleets already dominate last-mile parcel delivery. Amazon built its Delivery Service Partner network around that structure. FedEx has long operated Ground through independent contractors. Evri and DPD, the UK’s largest parcel networks, also rely on self-employed couriers.
UPS already uses a similar approach in the US by routing some business-to-consumer volume through Roadie, its delivery platform. US Teamsters are challenging that arrangement. A UK rollout would extend the approach into another market.
What to watch: UK shippers will be watching whether service levels hold if UPS moves to contractors. No decision has been made and the consultation remains open.
