United Parcel Service reported that average daily package volumes fell from 25.25 million in 2021 to 19.97 million in the first nine months of 2025, while total revenue slid from $97.29 billion to $64.18 billion over the same period. Adjusted operating margins contracted from 13.5% in 2021 to 6.8% through September 2025, and diluted earnings per share plunged from $14.68 to $4.46. Management has countered these pressures by raising fees and shifting away from lower-margin orders, but competitive pricing and higher labor and fuel costs have continued to squeeze profitability.

In November 2025, the Federal Aviation Administration grounded all of UPS’s MD-11 freighter aircraft—representing roughly 9% of the company’s fleet—after a fatal accident. This action struck during the holiday peak, forcing the network to reroute volume through trucks, partner carriers and other aircraft types. Preliminary estimates suggest this rerouting could add $200 million in additional network costs during the fourth quarter, potentially reducing Q4 operating margins by up to 30 basis points compared with prior guidance.

UPS has announced $3.5 billion in annualized cost savings for 2025 through workforce reductions, automation and facility consolidations. Despite missing its initial target of $9.61 billion in adjusted operating profit—now tracking closer to $8.47 billion—the company expects revenue to stabilize in 2026 with operating margins recovering by 100 to 150 basis points. Analysts forecast flat full-year revenue and a 7% increase in diluted earnings per share, driven by higher-margin verticals such as healthcare and small-to-medium business deliveries.