Network shake‑up raises worries about holiday parcels and could inch national shipping prices higher
United Parcel Service will cut about 2 % of its global workforce and close 73 U.S. facilities after trimming the volume it handles for Amazon by more than half. Executives say the drastic move, announced during last quarter’s earnings call, will make the network leaner and more profitable—yet consumers may feel the pinch as soon as fall.
Why UPS is slashing jobs and closing sorting centers across the United States right now
CEO Carol Tomé called Amazon “our largest customer, but not our most profitable,” noting that low‑margin e‑commerce parcels have strained UPS capacity for years. By stepping away from roughly one‑tenth of its revenue, the carrier expects to rely less on manual labor and invest heavily in automation. Chief financial officer Brian Dykes added that half the closures sit east of the Mississippi, where overlapping routes will be consolidated.
Still, 20,000 pink slips and dozens of darkened buildings leave a human toll the Teamsters union vows to contest. “If corporate cuts threaten union jobs, we’re ready for a fight,” union president Sean O’Brien warned.
How facility closures and workforce reductions could stretch delivery times during peak shopping season
Fewer local sort centers mean parcels will travel farther between remaining hubs, and analysts caution that one‑ to two‑day ground promises could slip in rural zones. Remember the 2019 holiday backups? Similar bottlenecks could reappear—especially if new tariffs or supply‑chain shocks spur last‑minute online buying.
Curious whether your ZIP code is on the watch list? UPS has not released a map, but independent consultants point to mid‑size cities losing secondary depots as the most vulnerable.
What everyday shippers and small businesses can do to cushion likely price increases this year? First, compare carrier rate sheets now rather than in November. Diversifying with USPS Ground Advantage or regional players like OnTrac can keep margins intact. Second, batch orders: multi‑item parcels usually cost less per unit than single‑item shipments.
Finally—have you considered in‑store pickup incentives? A small coupon for local pickup can slash fulfillment costs and build foot traffic.
| Service level | Current average UPS rate* | Expected post‑cut range* |
|---|---|---|
| Ground (3‑5 days) | $9.70 | $10.15 – $11.00 |
| 2‑Day Air | $18.40 | $19.25 – $20.10 |
| Next Day Saver | $28.60 | $29.50 – $30.75 |
*Unofficial estimates based on 2024 rate cards and consultant projections.
In the end, UPS believes a slimmed‑down, highly automated network will outrun inflation and keep Wall Street happy. Whether Main Street shippers agree depends on how smoothly parcels flow once the lights go off in those 73 buildings—and how much extra they pay to keep boxes moving.