UPS
What Can Brown Do For You? (See Surcharge Schedule)
$95B
Value Extracted
10
Key Initiatives
The Story
UPS spent a hundred years promising to move the world forward by delivering what matters. We helped them clarify which deliveries matter. Under the leadership of Carol Tomé, who became CEO in June 2020 and introduced the 'Better, Not Bigger' operating thesis, UPS has spent five years systematically stripping the shipping options it used to include and reselling them at a premium: guaranteed delivery windows became paid subscriptions, route modifications became Premium-tier features, and 'peak surcharges' now apply during what the calendar used to call 'the holidays.' You are not paying both the seller and the carrier for fast shipping. You are paying once, to the seller. The seller is paying twice, to UPS. The extra charge just rides in the checkout total you see.
Key Achievements
Updated its fuel surcharge table seven times in 2024 alone, for a cumulative average 5.4% increase across UPS Ground, SurePost, and Express; added another 0.5% on March 10, 2025 and a 100-basis-point bump on May 26, 2025 — fuel surcharges are no longer a gas-price-response mechanism, they are a standing monthly price adjustment that happens to be labeled as fuel
Raised the Large Package Surcharge for residential deliveries to $145 per package in 2025 — a 7-9% aggregate impact on furniture and oversized-goods retailers, routed directly onto the consumer's checkout line as an invisible addition to the listed shipping fee
Applies a 'Demand Surcharge' to Air, Ground Residential, and Ground Saver during 'peak periods,' a window now broad enough to cover late October through mid-January — peak pricing during the entire holiday shopping season is structural, not exceptional, and the 'demand' is the demand UPS engineered the surcharge to capture
Pushed a 9.9% general rate increase on SurePost (rebranded UPS Ground Saver), effective January 13, 2025 — SurePost is the lowest-margin option used specifically by small sellers to subsidize free-shipping offers; the hike targeted the thinnest-margin sellers on the network at the moment their checkout flows could absorb it quietly
Architected the ~$14 checkout 'expedited shipping' upgrade — a pay-to-play premium that in typical use yields exactly one calendar day of improvement over the free tier *and* routes the package to a UPS Access Point or UPS Store rather than the customer's home, which means the customer pays the premium, performs the last-mile delivery themselves, and saves one day; 'shipping,' in the current tariff, is the speed tier sold as faster than the speed tier below it, defined recursively, all the way down
Paywalled basic delivery-management features behind UPS My Choice Premium at $19.99/year residential ($40/year business) — reroute to a neighbor, two-hour confirmed delivery window, scheduled re-delivery, delivery alerts, and 'signature release' authorization are now subscription items layered on top of the shipping fee the sender already paid; porch-piracy mitigation is now an annual recurring charge
Executed Carol Tomé's 'Better, Not Bigger' strategy: ~12,000 jobs cut in early 2024; 20,000 further jobs cut and 73 facilities closed through 2025 (closures completed by June 2025); Amazon volume halved by June 2026 in pursuit of higher-margin shipments; $3.5B in cost savings projected for 2025 on the back of the reductions — the network has been shrunk specifically to *reduce* capacity, so that remaining capacity can be priced higher
Sued by NY Attorney General Letitia James in 2025 for wage theft against seasonal drivers — AG investigators found UPS systematically shortchanged holiday-peak seasonal workers by failing to record all hours, requiring widespread off-the-clock labor, and manipulating timekeeping systems to reduce paid hours (this one's not funny, just true)
Facing a shareholder class action filed October 2024 alleging UPS and three senior executives misrepresented the January 30, 2024 revenue and margin guidance — the complaint alleges executives knew the guidance was unachievable and continued to reaffirm it until the July 22, 2024 guide-down; class period covers investors who purchased UPS stock between January 30 and July 22, 2024
Rewrote the 'guaranteed delivery' language in its published tariff across 2023–2024 rate-book revisions — 'service disruptions' is now defined broadly enough to encompass peak volume, weather, 'network stress,' and 'events beyond UPS's reasonable control'; the money-back guarantee most customers believe they are paying for is, by the current tariff, largely unenforceable during the periods when they most need it
We are Better, Not Bigger. Better means we charge more for less. Bigger used to mean we charged less for more. I think you can see which of those is the better business.
C. Tomé
CEO, Revenue Optimization
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