UPS, the famous brown truck delivery company, is making its most significant cuts in decades. By mid-2025, 73 facilities will have closed, resulting in the loss of approximately 20,000 jobs.
This aggressive move comes as UPS is losing business to Amazon, which used to account for a significant share of its deliveries but has not generated much profit.
CEO Carol Tomé said the company has no choice, given the trade issues as challenging as any she has seen in a century.
Tariff Avalanche
President Trump’s new tariffs, set to take effect in 2025, will impose taxes on imports higher than at any point since the 1930s.
All imports faced at least 10% tariffs; for countries like China, rates soared to 145%. By August, a rule change ended the $800 duty-free threshold, so 4 million packages a day began facing new customs rules.
Federal Reserve officials said these tariffs pushed inflation higher and made interest-rate cuts impossible.
Twenty-Five Year Loophole
For 25 years, Americans enjoyed a rule that allowed them to shop globally: any item valued under $800 was exempt from additional tax.
That sparked a 10-fold surge in packages. Companies from Shein to Temu and even UK vintage sellers depended on this.
However, Trump’s August 2025 executive order closed this loophole, making all packages subject to strict customs immediately. Global mail carriers stopped sending items to the US while they figured out the new rules.
Revenue Freefall
UPS’s financials took a hit: shares dropped 20% by mid-year and market value shrank by a third to $75.6 billion. Package deliveries are down—especially from China.
UPS decided to take on significantly less Amazon work by 2026, as Amazon’s parcels paid poorly.
CEO Tomé said the business outlook was too uncertain to make any forecasts for 2025.
The 200% Nightmare
Some customers faced nightmare costs from errors.
When Sean Dickinson bought swords from Canada, UPS mistakenly labeled them as Russian aluminum and charged him a 200% tariff—$2,074 on a $1,098 order.
UPS’s own help site confirmed that “Russian aluminum” can trigger one of the steepest US import taxes, and Business Insider found dozens of confused shoppers stuck with similar bills, even on items with no Russian metal.
Customs Purgatory
Tens of thousands of dollars’ worth of packages started getting lost or destroyed after failing new customs checks.
Tea importers, students moving home, and collectors saw valuable shipments marked for disposal. UPS says it clears 90% of imports on the first day, but that means hundreds of thousands get delayed or trashed.
Customs brokers said they’d never seen this many panicked calls.
Wedding Saris Destroyed
Personal heartbreak followed. Anjani Mohan, a Michigan engineer, desperately tried to save a package containing her wedding sari, her mother’s sari, and family photos—all of which were marked for destruction after her parents mailed them from India.
Some students shipped belongings from overseas only to be told weeks later that their boxes were about to be thrown out, sparking frantic and emotional phone calls to try to intervene.
Broker Fee Explosion
All these customs changes made customs brokers the hottest property, raising their fees as importers begged for help.
Some brokers charged extra per customs code because many packages required additional paperwork.
Shipping giants like UPS, FedEx, and DHL have established additional teams to handle the new regulations, while routine import fees have also been increased.
This added more cost to every international transaction, swelling shipping bills.
Small Business Collapse
A survey revealed that 72% of small importers experienced a significant rise in costs, and approximately half were shipping less.
Some found new tariffs and processing fees as high as $400 on orders of $700—costs that customers would not be willing to pay.
Across the country, small companies suffered the most since they couldn’t afford extensive legal help or significant stockpiles of goods, unlike giants like Amazon.
The Teamster Trap
UPS is experiencing issues with its employee union. Its contract says it must add 30,000 union jobs, but at the same time, it’s cutting 20,000 positions.
The Teamsters union warned it would fight if UPS broke the contract.
Union employees just won pay raises worth $2.75 an hour now and $7.50 more by 2028—adding billions to UPS’s costs, even as it’s under pressure to cut expenses.
Network of the Future
UPS is investing billions in new, high-tech, automated facilities, closing older sorting centers, and opening 400 sites equipped with intelligent robots, artificial intelligence, and advanced tracking systems.
By automating, they aim to save $3.5 billion in 2025 alone and achieve faster, more efficient operations.
Yet, the flip side is the loss of thousands of jobs and 73 facility closures.
Consumer Exodus
Soaring bills made Americans stop shopping internationally. Some were charged more in surprise tariffs than their order was worth—a $750 computer part came with a $1,400 import bill.
Resellers of used clothes saw bills 400% higher than the value of the goods.
The number of overseas small-parcel shipments fell by three-quarters as shoppers temporarily gave up on global e-commerce.
Competitor Advantage
FedEx began to grab UPS’s market share, projecting 5–8% growth over the holidays, compared to flat or shrinking numbers from UPS.
Amazon, DoorDash, Uber, and new regional carriers teamed up to deliver more packages together than the traditional “big three” for the first time.
UPS is now barely ahead of Amazon’s own delivery service in market share volume.
Fed Intervention Blocked
Federal Reserve Chair Jerome Powell said the tariffs prompted the central bank to hold off on cutting interest rates, even though it would have otherwise.
Tariffs directly pushed up prices and blocked normal efforts to lower borrowing costs for businesses and families, linking UPS’s struggles to broader economic pain for nearly everyone.
The Unraveling
UPS’s problems aren’t just about one company—they highlight bigger headaches across America’s delivery system. Trade policies changed faster than businesses could adapt.
Now, UPS is forced to destroy thousands of packages, lay off workers, and stall investment, while customers and small businesses struggle to navigate the new rules. How UPS survives this storm will shape the future of US shipping and logistics.