Key Highlights
- Supply Chain Solutions leads growth: UPS reported a 7.8% year-on-year increase in Supply Chain Solutions revenue to US$2.9 billion, driven by strong performance in freight forwarding, logistics and healthcare services.
- International airfreight boosts forwarding: Forwarding revenue rose 8.1%, supported by higher international airfreight rates, while International Package revenue increased 12.5% to US$5 billion despite ongoing market disruptions.
- Healthcare logistics continues to expand: UPS generated more than US$3 billion in healthcare revenue during the quarter and expanded its cold-chain network with 27 new temperature-controlled cross-dock facilities.
- Amazon network transition completed: UPS confirmed it has completed the planned reduction of Amazon shipping volumes, a strategic move designed to improve profitability by focusing on higher-value and premium shipments.
- Transformation costs weigh on earnings: While consolidated revenue reached US$22.8 billion, restructuring expenses linked to network reconfiguration and workforce initiatives significantly impacted profitability in the U.S. Domestic Package business.
UPS Reports Strong Q2 Growth in Forwarding and Healthcare Logistics as Premium Strategy Gains Momentum
UPS delivered solid second-quarter growth in its Supply Chain Solutions business, with freight forwarding and healthcare logistics emerging as key drivers of revenue and profitability as the company continues its strategic shift toward higher-value cargo and premium services.
For the quarter, Supply Chain Solutions revenue increased 7.8% year-on-year to US$2.9 billion, while operating profit climbed 24.4% to US$291 million, reflecting strong demand for forwarding and integrated logistics services despite continued uncertainty across global freight markets.
The company said forwarding revenue rose 8.1% compared with the same period last year, supported primarily by stronger international airfreight rates.
International Business Delivers Higher Revenue
UPS also reported robust growth in its International Package business, where quarterly revenue increased 12.5% to US$5 billion.
The improvement was driven by an 18.9% increase in revenue per package, reflecting disciplined pricing and an improved mix of higher-value shipments across international trade lanes.
Although operating profit for the International Package division declined 7.3% to US$623 million, UPS noted that global trade flows continued to rebalance during the quarter, particularly across Asian markets, contributing to a healthier geographic distribution of business.
Premium Shipment Strategy Continues
The company’s U.S. Domestic Package segment generated US$14.8 billion in revenue, representing a 6% increaseover the previous year. Growth was largely attributed to a 9.3% increase in revenue per piece, reflecting UPS’s continued strategy of prioritising premium shipments over lower-margin volume.
Earlier this year, UPS completed its planned reduction in Amazon shipping volumes, following an agreement announced in January 2025 to reduce Amazon-related business by more than 50% by the second half of 2026.
Speaking during the company’s second-quarter earnings call, Chief Executive Officer Carol Tomé confirmed that both the Amazon volume reduction and the associated network restructuring programme have now been completed.
However, the extensive transformation programme significantly affected profitability within the domestic business. Operating profit for the U.S. Domestic Package segment fell sharply to US$16 million, compared with US$916 milliona year earlier, largely due to restructuring costs associated with employee separation programmes and ongoing network reconfiguration.
Average daily package volumes also reflected the transition. Total U.S. average daily volume declined 3.3%, while air package volume fell 2.3% year-on-year. Ground volume decreased 3.5%, with UPS attributing much of the reduction to lower Amazon shipments.
Healthcare Logistics Becomes Strategic Growth Engine
Healthcare continues to represent one of UPS’s fastest-growing strategic sectors.
During the quarter, the company generated more than US$3 billion in healthcare-related revenue and further expanded its specialised cold-chain infrastructure by adding 27 temperature-controlled cross-dock facilities.
According to Tomé, the facilities are designed to support rapid transfers of sensitive healthcare products between air and ground transport while maintaining strict temperature controls throughout the supply chain.
She noted that UPS remains uniquely positioned to provide end-to-end healthcare logistics using its own transportation assets, enabling greater visibility, operational control and service reliability for customers handling complex medical shipments.
Investing in Industrial Supply Chains
Beyond healthcare, UPS is also strengthening services for industrial manufacturing and automotive customers.
The company has expanded North American airfreight connectivity between the United States and Mexico while establishing a dedicated team of more than 300 supply chain specialists focused on supporting manufacturers and automotive supply chains.
These investments form part of UPS’s broader strategy to diversify revenue streams by concentrating on specialised logistics sectors that offer stronger margins and long-term growth potential.
Transformation Programme Delivering Cost Benefits
UPS’s ongoing business transformation continues to reshape its global network through facility consolidation, fleet optimisation, workforce restructuring and end-to-end process redesign.
The company said the programme generated approximately US$1.2 billion in benefits during the first six months of 2026 and remains on track to deliver around US$3 billion in cost savings for the full year.
Overall, UPS reported consolidated second-quarter revenue of US$22.8 billion, with consolidated operating profit reaching US$930 million, demonstrating continued resilience as the company advances its strategy of building a leaner, more profitable logistics network centred on premium services and specialised supply chain solutions.
