★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
VOL. XCIV, NO. 247
Stock Profile
United Parcel Service, Inc. (UPS) Moat Analysis
United Parcel Service, Inc.
UPS · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
UPS operates integrated parcel networks across more than 200 countries and territories. Q2 2026 U.S. Domestic, International, and Supply Chain Solutions revenue shares were 65.4%, 22.1%, and 12.5%; GAAP operating-profit shares were 1.7%, 67.0%, and 31.3% because domestic transformation charges sharply reduced reported profit. The defensible advantages are domestic route density and the international hub-and-delivery network. Scale is not counted separately from density, observed yield is not treated as a benchmark-pricing moat, and Supply Chain Solutions is verified moatless. At July 17, 2026, 101,432,177 Class A and 749,349,405 Class B shares were outstanding. Only voting Class B trades publicly as NYSE UPS; Class A is unlisted and convertible, so UPS is a direct common-share listing rather than an ADR.
Primary segment
U.S. Domestic Package
Market structure
Oligopoly
Market share
29.7% (reported)
HHI: 2,320
Coverage
3 segments · 6 tags
Updated 2026-08-23
Segments
U.S. Domestic Package
U.S. small parcel and time-definite package delivery
Revenue
65.4%
Structure
Oligopoly
Pricing
moderate
Share
29.7% (reported)
Peers
International Package
International express and deferred small parcel delivery
Revenue
22.1%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Supply Chain Solutions
Freight forwarding, healthcare logistics, contract logistics, returns and related supply-chain services
Revenue
12.5%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
U.S. Domestic Package
U.S. small parcel and time-definite package delivery
Q2 2026 revenue was $14.930B of $22.834B consolidated revenue. GAAP operating profit was only $16m of $930m because transformation charges were concentrated in this segment; adjusted operating profit was $1.188B. Average daily volume fell 3.3% to 16.002m, GAAP cost per piece rose 16.8%, and adjusted margin was 8.0%. UPS completed the Amazon glide-down, permanently closed 44 buildings in the first half, and outsourced part of Ground Saver delivery. Scale and rate-setting are treated as consequences of the same physical network,not additional moats. Source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026053249/ups-20260630.htm
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
A nationwide integrated pickup, sort, linehaul, and last-mile network still provides hard-to-replicate coverage and route density at roughly 16 million U.S. packages per day. Durability is moderated because volume declined, UPS permanently closed 44 buildings, outsourced part of Ground Saver delivery, and large shippers can insource or shift carriers.
Physical Network Density moat: definition, examples, and stocks
Erosion risks
- Amazon Logistics and regional carriers expanding last-mile density
- USPS expanding last-mile partnerships and offerings
- Volume declines reduce network utilization and density advantages
Leading indicators
- U.S. average daily volume and stop density
- On-time performance metrics
- Cost per piece / margin trend in U.S. Domestic
Counterarguments
- Shippers increasingly multi-source across UPS/FedEx/USPS/Amazon and regional carriers
- E-commerce networks (notably Amazon) are building comparable last-mile density in key metros
International Package
International express and deferred small parcel delivery
Q2 2026 revenue was $5.044B of $22.834B consolidated revenue and GAAP operating profit was $623m of $930m. Revenue rose 12.5% and revenue per piece rose 18.9%, but average daily volume fell 5.8% and operating profit fell 7.3%; operating margin was 12.4%. The global integrated network remains difficult to reproduce, while DHL and FedEx provide credible alternatives. Source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026053249/ups-20260630.htm
Service Field Network
Supply
Service Field Network
Strength
Durability
Confidence
Evidence
Global air hub-and-spoke infrastructure and international delivery footprint support time-definite cross-border service levels.
Service Field Network moat: definition, examples, and stocks
Erosion risks
- Trade policy, tariffs, and customs/regulatory changes
- Macro downturn reduces premium international volumes
- Competitive intensity from DHL and other integrators
Leading indicators
- International export volume growth by lane
- International average revenue per piece
- On-time performance on key lanes
Counterarguments
- DHL has comparable or stronger network density in parts of Europe and other regions
- Postal operators and regional integrators can undercut on deferred services
Supply Chain Solutions
Freight forwarding, healthcare logistics, contract logistics, returns and related supply-chain services
Q2 2026 revenue was $2.860B of $22.834B consolidated revenue and GAAP operating profit was $291m of $930m. Revenue rose 7.8%, operating profit rose 24.4%, and margin was 10.2%; forwarding, logistics, and other revenue were $791m, $1.540B, and $529m. Healthcare and cold-chain capabilities are valuable, but the evidence does not demonstrate superior retention, protected certifications, or pricing versus specialized peers. Warehouses, forwarding capacity, and returns services are replicable, so the segment is verified moatless. Source: https://www.sec.gov/Archives/edgar/data/1090727/000162828026053249/ups-20260630.htm
Evidence
We deliver approximately 15 million ground packages per day
Ground package volume and stop density underpin network advantages in domestic parcel delivery.
Our ground fleet serves substantially all business and residential zip codes in the contiguous U.S.
Broad last-mile coverage supports dense routing and service consistency.
UPS is still on the top of the list with revenues of $58.3 billion
Used with the report's $196B total U.S. domestic parcel revenue to estimate UPS revenue share.
Parcel revenues grew by 4.1 percent to reach $196.0 billion
Revenue totals and carrier revenue figures in the report support the approximate revenue-based HHI.
We operate international air hubs in Germany, China, Hong Kong, Canada and Florida.
International hubs and integrated air network support global express delivery capabilities.
Showing 5 of 6 sources.
Risks & Indicators
Erosion risks
- Amazon Logistics and regional carriers expanding last-mile density
- USPS expanding last-mile partnerships and offerings
- Volume declines reduce network utilization and density advantages
- Labor cost inflation and operational disruption (e.g., labor actions)
- Permanent facility closures and outsourced Ground Saver stops reduce owned-network density
- Trade policy, tariffs, and customs/regulatory changes
Leading indicators
- U.S. average daily volume and stop density
- On-time performance metrics
- Cost per piece / margin trend in U.S. Domestic
- Carrier volume/revenue share trends (ShipMatrix / Pitney Bowes)
- International export volume growth by lane
- International average revenue per piece
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