UPS Doesn’t Want Your T-Shirts Either
A few weeks ago, FedEx shared that it’s not too interested in shipping low-value e-commerce like t-shirts. Unsurprisingly, UPS doesn’t want them either. And that’s not all. The carrier is making cuts across the board in hopes of increasing its revenue.
At the 47th Annual Raymond James Institutional Investor Conference on March 4, UPS leadership laid out a roadmap for growth. Long story short: It plans to shrink its infrastructure and court clients that won’t mind price hikes. If you’re concerned that you’re paying too much for shipping, keep reading.
How Will UPS Save Money?
UPS plans to cut hours, positions, volume, and buildings to grow revenue. In 2025, UPS surpassed its original goals of reducing operational hours by 25 million, closing 73 buildings, and cutting 30,000 positions. By the end of the year, it had reduced its workforce by 48,000 and closed 93 facilities. This year, it aims to cut operational hours by another 25 million, reduce 30,000 jobs, and, in the first half of 2026, close 24 buildings with more to come in the second half. If all goes to plan, the cuts this year should equate to $3 billion in savings.
Between last year and the first half of this year, UPS will cut 2 million Amazon parcels per day and shed $5 billion in revenue. This “right-sizing” initiative aims to free its infrastructure of unprofitable customers in favor of higher-value verticals that need specialized services.
UPS Prioritizes Clients that “Don’t Care” About Price Increases
At the Raymond James Conference**,** UPS CFO Brian Dykes said that UPS is “leaning into the parts of the market where we can drive more value, which means you have better pricing power, right?” Pricing power, in this instance, means the ability to increase shipping rates without pushback. Usually, this is the unspoken part, but Dykes said it out loud: “Healthcare, high-value goods, complex supply chains, really sticky. When you’re, you know, 99.99% on clinical trials drugs, they don’t care if you put a 5% price increase through, right?”
And here, Dykes singles out t-shirts, just like FedEx : “It’s a whole different ballgame than if you’re talking about a T-shirt, right? Going to a residence.”
The implication here is that businesses shipping low-value goods care more about pricing than UPS clients shipping high-value products in the B2B, healthcare, and SMB sectors.
Don’t Want to Pay UPS’s Arbitrary Increases? ShipRx Can Help!
While some businesses may have higher margins, we’ve yet to discover one that will happily overpay for shipping.
Whether you’re an e-commerce business shipping t-shirts or a healthcare company that doesn’t want to spend your margins on surprise 5% increases, you need ShipRx on your side. With a 100% success rate in UPS contract negotiations, we can help you secure the lowest possible parcel rates according to your industry and volume needs.
Set up a free savings analysis today, and protect yourself against surprise rate hikes and unwarranted surcharges.