UPS: A Slow Paddle Upstream

Now, I reckon most folks look at a company like UPS and see a fleet of brown trucks and a whole lot of packages. They see progress, efficiency, the march of commerce. I see a fella paddling upstream against a current of his own making. Last year, 2025, wasn’t exactly a banner year for UPS, and I suspect the books will tell a similar tale for a spell. Revenue dipped, earnings followed suit—a predictable outcome when you deliberately poke the bear, or in this case, politely ask Amazon to take its business elsewhere.

They call it “strategic realignment,” a fancy way of saying they decided to lessen their dependence on a single customer. A sensible notion, perhaps, if you’ve got a river of other customers lined up to fill the void. But I’ve observed, in my years of watchin’ markets, that severing a profitable tie simply because it might become a burden is akin to throwin’ away a good hat to avoid a possible rainstorm. It’s a gamble, plain and simple.

A Year of Trimming and Tightening

The numbers don’t lie. Revenue fell nearly 3% to $88.7 billion, and profits took a tumble too. The Amazon decision, you see, wasn’t just about losin’ packages; it was about losin’ the kind of packages that didn’t require a lot of fuss. Amazon, it seems, wasn’t payin’ top dollar for the privilege of havin’ UPS haul their wares. They wanted a bargain, and UPS, in a fit of independence, decided to let ’em have it. A noble gesture, perhaps, but a costly one.

Now, UPS ain’t one to sit idle. They commenced a right proper pruning. Forty-eight thousand positions vanished, ninety-three buildings were shuttered, and automation was brought in to do the work of honest folk. They saved $3.5 billion, they say. A tidy sum, to be sure, but I reckon a company is more than just a balance sheet. It’s the folks doin’ the work, and losin’ that many is bound to leave a mark.

They also went on a buyin’ spree, snatchin’ up Frigo-Trans, BPL, and Andlauer Healthcare Group. Healthcare logistics, they claim, is the future. Might be true. But I’ve seen enough “futures” come and go to know that what’s new today is often yesterday’s fad tomorrow.

Looking Ahead: A Slow Turn of the Tide

UPS expects things to turn around, naturally. They’re bettin’ on a leaner, more agile company. They anticipate revenue of $89.7 billion, a paltry 1.1% increase. They’re hopin’ to hold steady on earnings. A modest expectation, wouldn’t you say? They’re plannin’ to shed another 30,000 positions and close even more buildings. It’s a curious strategy, this—shrinkin’ your way to prosperity. Reminds me of a fella tryin’ to lose weight by cuttin’ off his legs.

They reckon the second half of the year will be the turnin’ point. Volumes from non-Amazon customers will rise, profits will improve. It’s a hopeful tale, and I wouldn’t begrudge ’em the success. But I’ve learned, in my time, that hope is a flimsy raft in a turbulent sea. It’s a good thing to have, mind you, but it ain’t a substitute for solid ground.

They’re expectin’ $6.5 billion in free cash flow, which will help cover their $5.4 billion in dividends. A bit of cushion, they say. A wise precaution, I reckon, when you’re paddlin’ upstream against a strong current.

A Leaner Ship, Perhaps, But Still a Long Voyage

UPS has made progress, no doubt. They’ve trimmed the fat, tightened the belts, and made a few strategic bets. But they still have a long voyage ahead. They’re bettin’ on a leaner, more agile company. A sensible notion, but one that requires a steady hand and a bit of luck. I suspect the stock price might rise a bit, as the market rewards their efforts. But I wouldn’t go wagerin’ the farm on it. There are still plenty of rapids ahead, and a fella can easily capsize if he ain’t careful.

2026-01-29 16:23

A Year of Trimming and Tightening

Looking Ahead: A Slow Turn of the Tide

A Leaner Ship, Perhaps, But Still a Long Voyage

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