UPS Shares Plunge 9.8% on Amazon Supply Chain Services Launch
UPS•UPS shares plunged 9.8% after Amazon launched Amazon Supply Chain Services (ASCS), directly targeting UPS’s core small- and medium-business logistics market. UPS will cut Amazon volumes by 50% through mid-2026, while surging diesel and jet fuel costs threaten to compress freight margins further.
1. Amazon Launches ASCS Competitor
Amazon has opened its logistics platform to all customers through Amazon Supply Chain Services (ASCS), leveraging its existing network and technology to serve small- and medium-sized businesses. The move directly challenges UPS’s core SMB segment by offering integrated shipping, warehousing, and fulfillment solutions under one brand.
2. UPS Volume Cuts and Stock Reaction
In response to the new threat, UPS announced it will reduce Amazon-related shipments by 50% through mid-2026. The announcement triggered a 9.8% drop in UPS share price as investors weighed the impact on revenue and market share.
3. Rising Fuel Costs Squeezing Margins
Freight carriers face escalating input costs as diesel and jet fuel prices have surged year-to-date, putting additional pressure on profit margins. Analysts warn that higher fuel expenses could further erode UPS’s operating income if not offset by pricing adjustments or efficiency gains.
