VOL. XCIV, NO. 247
★ MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 5 CENTS
Tuesday, December 23, 2025
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 is a global package delivery and logistics provider with an integrated air-and-ground network spanning over 200 countries and territories and ~22.4 million average daily packages in 2024. The U.S. Domestic Package segment is the core profit pool, where network density and scale drive route efficiency, supported by service reliability and technology-enabled visibility/embedded shipping integrations. International Package leverages global air hubs for time-definite cross-border services in an oligopolistic integrator market. Supply Chain Solutions (forwarding, contract logistics, digital/returns) broadens the portfolio but faces more competitive and cyclical economics.
Primary segment
U.S. Domestic Package
Market structure
Oligopoly
Market share
34.3% (reported)
HHI: 2,639
Coverage
3 segments · 6 tags
Updated 2025-12-22
Segments
U.S. Domestic Package
U.S. small parcel and time-definite package delivery
Revenue
66.3%
Structure
Oligopoly
Pricing
moderate
Share
34.3% (reported)
Peers
International Package
International express and deferred small parcel delivery
Revenue
19.7%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Supply Chain Solutions
Freight forwarding, contract logistics, returns and related supply-chain services
Revenue
14%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
U.S. Domestic Package
U.S. small parcel and time-definite package delivery
Source: UPS FY2024 Form 10-K (filed 2025-02-18). Amazon represented ~11.8% of consolidated revenue in 2024 (substantially all within U.S. Domestic Package) and UPS disclosed an agreement in principle to reduce this customer volume by more than 50% by June 2026. UPS began delivering 100% of SurePost volume starting Jan 1, 2025 (previously final delivery was often via USPS). URL: https://investors.ups.com/sec-filings/all-sec-filings/content/0001090727-25-000019/0001090727-25-000019.pdf
Physical Network Density
Supply
Physical Network Density
Strength: 5/5 · Durability: durable · Confidence: 5/5 · 2 evidence
Nationwide pickup-and-delivery density and integrated air/ground network support high service levels and route efficiency in the U.S.
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
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
High throughput spreads fixed network costs (hubs, fleet, tech) and supports unit-cost advantages when volume is stable.
Erosion risks
- Loss of large-customer volume reduces fixed-cost absorption
- Higher labor costs can offset scale benefits
- Automation capex may not yield expected cost reductions
Leading indicators
- Average daily volume and revenue per piece
- Network utilization and sort capacity metrics
- Mix shift toward lower-yield products (e.g., economy/returns)
Counterarguments
- Large customers can insource or rebid volumes, limiting long-term scale advantages
- USPS and alternative carriers can underprice on low-value residential deliveries
Benchmark Pricing Power
Financial
Benchmark Pricing Power
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Published rate cards and accessorial fees enable periodic price increases, though large shippers negotiate aggressively.
Erosion risks
- Competitive pricing pressure in B2C and economy products
- Large-customer contract repricing lowers net yields
Leading indicators
- Average revenue per piece and yield
- Discount rate trends and accessorial revenue
- Churn among top 25 customers
Counterarguments
- Rate increases are often matched by peers and offset by higher discounts
- E-commerce shippers can shift volume to the cheapest service that meets SLA
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 1 evidence
Shipping, tracking, billing and embedded checkout integrations increase operational switching costs for SMB and e-commerce shippers.
Erosion risks
- Multi-carrier shipping software reduces integration lock-in
- E-commerce platforms increase carrier choice and price transparency
Leading indicators
- Digital Access Program adoption / volume attributed to DAP
- Customer churn and net revenue retention in SMB
- Share of shipments purchased via partner platforms
Counterarguments
- Most shippers can switch carriers within shipping software; integrations are often standardized
- Carriers compete heavily on price and surcharges even with integrations in place
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Service reliability and long-term shipper relationships support premium positioning for time-definite delivery.
Erosion risks
- Service disruptions can quickly damage brand perception
- Price competition encourages customers to trade down to cheaper alternatives
Leading indicators
- On-time performance vs peers
- Claims/damage rates and customer complaints (where disclosed)
- Customer concentration and contract renewals
Counterarguments
- For many shippers, carrier choice is primarily price-driven and multi-sourced
- Amazon and USPS can be acceptable substitutes for slower/low-value shipments
International Package
International express and deferred small parcel delivery
Source: UPS FY2024 Form 10-K (filed 2025-02-18). International Package includes operations across EMEA, the Americas and Asia, offering guaranteed day- and time-definite services plus deferred and economy options. URL: https://investors.ups.com/sec-filings/all-sec-filings/content/0001090727-25-000019/0001090727-25-000019.pdf
Service Field Network
Supply
Service Field Network
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Global air hub-and-spoke infrastructure and international delivery footprint support time-definite cross-border service levels.
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
Operational Excellence
Supply
Operational Excellence
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Operational technology (visibility, tracking, network optimization) supports reliability and efficiency in complex cross-border networks.
Erosion risks
- Technology advantages diffuse as competitors adopt similar tools
- Operational disruptions (weather, labor, geopolitical events)
Leading indicators
- Service quality metrics (late deliveries, claims)
- Unit cost and margin trend in International Package
Counterarguments
- Technology is increasingly commoditized across major carriers
- Cross-border service is vulnerable to exogenous disruptions outside carrier control
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength: 2/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Customer-facing tools and embedded integrations lower friction for SMEs and support repeat shipping behavior.
Erosion risks
- SMBs use multi-carrier platforms that abstract away carrier choice
- Marketplace shipping programs steer volume based on price
Leading indicators
- SMB export volume growth
- Share of label purchases via partner platforms
Counterarguments
- International shipping labels are easy to compare and switch among carriers
- Many exporters use freight forwarders that choose carriers on their behalf
Supply Chain Solutions
Freight forwarding, contract logistics, returns and related supply-chain services
Source: UPS FY2024 Form 10-K (filed 2025-02-18). Supply Chain Solutions includes forwarding, logistics, and digital businesses (e.g., Roadie and Happy Returns). UPS divested its truckload brokerage business (Coyote) in September 2024. URL: https://investors.ups.com/sec-filings/all-sec-filings/content/0001090727-25-000019/0001090727-25-000019.pdf
Scope Economies
Supply
Scope Economies
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
Broad portfolio (forwarding, contract logistics, customs brokerage, insurance, returns) enables cross-selling and end-to-end solutions for complex supply chains.
Erosion risks
- Customers unbundle to best-of-breed forwarders/3PLs
- Freight forwarding is price-competitive and cyclical
- Execution complexity across multiple service lines
Leading indicators
- SCS operating margin trend
- Growth in healthcare logistics and specialized offerings
- Cross-sell attach rates (parcel + logistics) where disclosed
Counterarguments
- Asset-light forwarders and pure-play 3PLs can match service breadth via partners
- Many customers select providers via competitive tenders with frequent rebids
Service Field Network
Supply
Service Field Network
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 2 evidence
Global distribution and returns footprint plus proximity to UPS transportation hubs support rapid fulfillment and reverse logistics.
Erosion risks
- Warehouse and fulfillment space is replicable (capex + leases)
- Digital returns and same-day services face new entrants
Leading indicators
- Capacity utilization in logistics facilities
- Returns volume growth and processing times
- Customer concentration in key verticals (e.g., healthcare)
Counterarguments
- Contract logistics is crowded; customers can switch providers at renewal
- Large retailers can build in-house fulfillment and returns networks
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength: 2/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Digital offerings (same-day via Roadie, returns via Happy Returns, insurance via UPS Capital) can embed UPS into customer workflows, but switching costs vary by product.
Erosion risks
- Returns and last-mile platforms are easy to multi-home
- Competitive marketplaces can route demand to lowest-cost providers
Leading indicators
- Happy Returns adoption (merchant count/volume) where disclosed
- UPS Store access-point footprint changes
- Attach rate of UPS Capital insurance
Counterarguments
- Returns and same-day delivery often have low contractual lock-in
- Alternative platforms can integrate with the same e-commerce front ends
Evidence
In 2024, we delivered an average of 22.4 million packages per day.
Scale and stop density underpin network advantages in domestic parcel delivery.
Our U.S. ground fleet serves all business and residential zip codes in the contiguous 48 states.
Broad last-mile coverage supports dense routing and service consistency.
We combine all packages within our single, global network.
Single-network design supports operational and capital efficiencies that scale with volume.
will provide for a reduction in their volume by more than 50% by June 2026.
Large-customer volume shifts can weaken fixed-cost absorption and density economics.
In December 2023, we implemented an average 5.9% net increase in base and accessorial rates.
Supports ability to execute periodic pricing actions in an oligopolistic market.
Showing 5 of 18 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)
- Loss of large-customer volume reduces fixed-cost absorption
- Higher labor costs can offset scale benefits
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 (e.g., Pitney Bowes)
- Average daily volume and revenue per piece
- Network utilization and sort capacity metrics
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.