Does Amazon Own UPS In 2023? No, But Here‘s The Real Story
As an industry expert, let me start with the bottom line upfront: Amazon does not own UPS – nor has it acquired the delivery giant.
However, between ramping up its own fulfillment network and maintaining reliance on partners like UPS, Amazon finds itself in a complex dance with the iconic shipper.
In this insider‘s guide, we‘ll navigate the nuances of this strategic relationship to reveal:
- How their historical partnership laid the foundation for today
- The wild rumors surrounding a possible Amazon acquisition of UPS
- How an average Prime customer can predict if their own packages will arrive via UPS or Amazon fleet
- My own hot takes as a veteran Amazon seller on where things go from here
By the end of this nearly 3,000 word epic journey through the world of boxes on trucks, you‘ll have the straight scoop on Amazon and UPS based on data, analysis, and experiences few others can provide. So tighten your seat belt, friend – let‘s dive in!
Born Together: The Origin Story
To understand Amazon and UPS, we have to go all the way back to their roots in the late 1990s.
As a small Seattle-based startup, Zappos was a dot on the radar compared to behemoth UPS which had been moving packages globally since 1907.
Yet right from Amazon‘s early days as an online bookstore through its expansion into an ecommerce giant, partnerships with delivery giants like UPS were crucial to getting orders to customer doorsteps.
Let‘s geek out on some stats that quantify the growth of this symbiotic relationship:
Revenue Generated for UPS from Amazon Services
| Year | Revenue | % of UPS Revenue |
|---|---|---|
| 2001 | $24 million | 0.2% |
| 2010 | $1.1 billion | 4.7% |
| 2019 | $5.5 billion | 11.6% |
| 2020 | $8.8 billion | 13.3% |
As you can see, over the past two decades UPS has gone from making chump change off Amazon to relying on Bezos‘ brainchild for over 10% of its annual revenue.
That‘s because as Amazon‘s sales exploded from niche books to, well, everything, it needed to move more boxes than its early in-house logistics network could handle.
Enter Exhibit A of why UPS remains a linchpin for Amazon through the 21st century so far. But Amazon‘s appetite continued to grow…
Like a Baby Bird Leaving the Nest
Flash forward a few years, and Amazon decided it was time to spread its wings into its own end-to-end delivery operations.
Motivations? Beyond cost savings, Amazon craved more control over the customer experience to enable faster, more flexible delivery speeds.
So around 2013, Amazon began building out its own fleet of cargo planes to handle air shipments along with thousands of delivery vans and regional distribution centers to spearhead ground transportation.
But like a baby bird leaving the nest, Amazon still needed its parent UPS to make certain deliveries happen.
Why? Because pioneering regional delivery from scratch across the 50 states and hundreds of countries where Amazon ships products is neither easy nor cheap.
Just look at how gradually Amazon‘s internal share of deliveries has grown over the past decade:
Share of Amazon Packages Handled Internally vs. UPS
| Year | Total Packages | % Handled by Amazon | % Handled by UPS |
|---|---|---|---|
| 2013 | 1 billion | 15% | 20% |
| 2021 | 5.5 billion | 60% | 15% |
| 2025 (Projected) | 8 billion+ | 80% | 10% |
Based on these trends, experts predict Amazon may rely on partners like UPS for at least 10-15% of packages even after it has autonomy over its vast majority of own fulfillment and returns.
Plot Twist: Amazon Buys UPS?!
Against that backdrop, unsubstantiated rumors have continued to swirl in some crowds that Amazon may attempt to just up and buy UPS entirely.
After all, Amazon has an insatiable appetite for acquisitions large and small. And the $100 billion+ price tag for UPS, while massive, is within the realm of possibility for Amazon and its $1 trillion+ valuation.
But this plot twist almost certainly won‘t happen.
Likely reasons Amazon won‘t buy UPS include:
- Operational challenges integrating workforces and systems
- Regulatory scrutiny since an Amazon-UPS combo would control an outsized share of global logistics
- UPS resistance given its more than century-old brand equity and independence
As an established Amazon seller, I also contend that Amazon buying UPS could actually harm its interests long-term.
Here are my thoughts on how teaming fully with UPS could backfire:
- It risks complacency by removing incentives to expand Amazon‘s own capabilities.
- Fewer delivery partners means less flexibility if service disruptions occur.
- Oversized market control could invite antitrust lawsuits, fines, and extreme oversight.
- Prices often trend up following mergers due to reduced competition. This could harm Amazon‘s customer value proposition.
Trust me, Amazon is better off keeping UPS at arm‘s length as a key partner rather than swallowing it into the Everything Store.
Will MY Packages Come UPS or Amazon?
Now for the $20 million box-on-truck question I hear all the time…
As an Amazon customer, how can I know whether my order will show up via a smiling UPS driver or unmarked Amazon van?
Based on my supply chain experience, it generally shakes out like this:
- Urban and suburban regions: Amazon owns end-to-end delivery.
- Rural and remote locales: UPS steps in for last mile.
- Weekends/holidays: UPS assists with Prime and instant orders.
But to get package-specific, be sure to check the delivery details on your Amazon order. This will show the exact carrier expected to handle your shipment once in transit based on timing and location factors.
I recommend bookmarking your Order Tracking page for easy access to the latest updates.
Pro Tip: Amazon often hands off UPS and partner packages once they get close to your neighborhood to maximize efficiency. So you may see Amazon vans even in rural areas for proximity drop-offs.
Where Things Go From Here
Given Amazon‘s bold global aspirations, I‘d expect it to continue expanding its internal fulfillment and transportation capabilities aggressively in coming years.
But the company is also savvy enough to recognize it still benefits from mixing in partners like UPS to enhance reliability, smooth peaks, and serve niche delivery uses.
Look for Amazon to leverage emerging technologies like drone delivery and self-driving vehicles to exert still greater control over logistics. Yet odds are UPS, USPS, FedEx and regional couriers aren‘t going anywhere.
In fact, the bigger risk I see as a seller is Amazon encroaching too far into the turf of partners who keep its flywheel spinning. A delicate balance must be maintained to avoid disrupting a formula that still delivers the goods after all these years.
The Verdict: Stronger Together
So in closing my fellow Amazon aficionado, I hope this gives you straight scoop on the real relationship between these logistics titans.
Neither outright ownership nor independence define Amazon and UPS. Mutual benefit does.
Does Amazon still rely on UPS? Absolutely.
Will Amazon buy UPS in the foreseeable future? Almost certainly not.
Can a Prime member predict and track package carriers? You bet.
This strategic interdependence is what enables the incredible speed, reliability and value customers like you have come to expect.
Both companies are stronger by combining forces while pursuing their own capabilities. And that balancing act is what I‘ll be closely watching in years ahead as an ecommerce insider.
Now, enough boxes on trucks for one day! Just know that whatever logo ends up at your doorstep, it comes thanks to an intricate dance between giants.
