United Parcel ServiceUPS

01In the first six months of 2026, we achieved approximately $1.2 billion of program benefits from these initiatives. We expect to achieve approximately $3 billion in full year 2026 benefits from these initiatives. In the first half of 2026, we closed 45 leased and owned buildings, 44 of which have been permanently closed. Non-GAAP adjusted cost per piece increased 8.0% (up 8.7% year to date). These initiatives are expected to conclude by 2027.

02UPS is deliberately shedding low-margin, high-volume e-commerce business (including more than 50% of its largest customer's volume) while growing higher-yielding SMB traffic through its Digital Access Program. Revenue per piece rising 9.3% while volumes fall indicates pricing power and mix improvement that could reset the domestic package segment toward structurally higher margins once the network right-sizes.

03UPS is building a differentiated healthcare logistics franchise requiring specialized temperature-controlled infrastructure and regulatory know-how that commodity parcel carriers cannot easily replicate. The AHG integration and continued cold-chain investment position UPS to capture share in a higher-margin, stickier vertical where service requirements create switching costs.

04UPS's weekly-resetting fuel surcharge mechanism functionally passes through volatile jet and diesel costs to customers with minimal lag, insulating margins from commodity swings that could otherwise compress earnings. This contractual pass-through capability reflects embedded pricing power in a capital-intensive, fuel-exposed business.