UPS is investing heavily in automation at its sorting centers, warehouses, and logistics networks to reduce costs, improve efficiency, and handle growing e-commerce volumes. At the company’s most recent investor meeting, it was reported that 68.5 percent of the company’s U.S. delivery volumes are handled in automated facilities, compared with 64 percent the previous year. And the automation initiatives are continuing at a rapid pace.
“The cost per unit in an automated facility is about 28 percent lower than in a non-automated one,” noted the company’s CEO, Carol Tomé, adding:
– To put the automation rate into perspective—what does 68.5 percent mean? It corresponds to 337 million more packages being processed automatically compared to a year ago. This creates enormous capacity to handle higher volumes. And we’re ready for it.
”Network of the Future”
In March 2024, UPS announced a multi-year automation program valued at approximately $9 billion. As part of the program, called ”Network of the Future,” more than 60 additional facilities will be automated, while the company’s logistics network will be optimized. The goal of the initiative is to achieve significant cost savings and increase productivity. In early 2026, UPS reported that its 127 automated warehouses would be supplemented by an additional 24 facilities during the year. In total, the investment encompasses 63 major automation projects, with the long-term goal of increasing the number of automated sorting facilities to approximately 400. UPS expects the initiative to generate approximately $3 billion in annual savings once the program is fully implemented in 2028. As part of this initiative, 200 older facilities will be closed, with their volumes transferred to more automated and cost-effective hubs.
A wide range of solutions
The facilities use a wide range of automation solutions to, among other things, move and sort packages of various sizes, process orders, and handle pallets and unload trucks and containers. In parallel with its automation program, UPS is investing in artificial intelligence across its entire operations, including for route and network optimization, demand forecasting, exception handling, customer service, and visibility and traceability.
”Supports the warehouse staff”
UPS emphasizes that its investments in automation are intended to eliminate repetitive and physically demanding tasks while improving safety. Automated unloading, robotic picking, and AI-assisted workflows are being introduced to complement human workers and improve productivity.
78,000 jobs are affected
At the same time, UPS has just concluded its initiative to reduce its deliveries for Amazon. Amazon currently accounts for about 9 percent of UPS’s total revenue, compared to 13 percent in 2020, the year of the COVID-19 pandemic. During the investor meeting, Carol Tomé noted that Amazon’s volumes were of lower quality and that automation creates the conditions for more profitable business. The scaling back of the Amazon business will result in a total of 78,000 employees being laid off and the closure of nearly 150 hubs and warehouses.
From a package delivery company to a tech company
In summary, it can be concluded that the ongoing transformation and automation efforts at UPS are resulting in lower operating costs, increased throughput, improved delivery reliability, visibility, and service, as well as a reduced need for manual, repetitive warehouse tasks. This transformation is turning the logistics giant from a traditional package delivery provider into a tech company with a highly automated logistics network that combines robotics, AI, and advanced data analytics.
UPS is one of the world's largest companies, with operations in more than 200 countries and territories and revenue of $88.7 billion in 2025. The company employs a total of approximately 460,000 people worldwide.
