UPS Targets Data Center Logistics as New Revenue Driver
UPS told investors it sees a $15 billion logistics opportunity tied to data center growth, a market the company is targeting to offset volume losses from its ended partnership with Amazon. CEO Carol Tomé highlighted the opportunity during an Oct. 27 earnings call, as UPS reported a 4.2% decline in package volumes but a 7% increase in average revenue per package. Revenue growth came from healthcare shipments and the company’s returns business, Happy Returns.
Data center logistics are growing faster than traditional package delivery, according to Matt Guffey, UPS’s chief U.S. domestic officer. He said the company is positioned to handle the complex supply chain requirements of data centers, an area where UPS has been investing in cold chain and other specialized capabilities to differentiate from competitors. The shipping company also identified automotive and tech sectors as growth areas.
UPS has been shedding low-margin Amazon volume since the two agreed to wind down their partnership last year. Amazon had negotiated significant shipping discounts due to its scale, compressing UPS’s per-package revenue. The Atlanta-based company delivered 46 million fewer packages in the second quarter of 2026 compared to the prior year as that partnership concluded.
Amazon announced in May it would enter supply chain logistics for large companies, but UPS leadership said it has not seen meaningful business impact. CEO Tomé told investors the two companies operate different networks. Industry observers note Amazon has capital to invest in specialized logistics if it chooses, though it currently serves a different customer base than UPS and FedEx.
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