UPS Cuts Amazon Volume by 50% — 3 Reasons EU Sellers Need Independent Storage in Germany Now
UPS Cuts Amazon Volume by 50% — 3 Reasons EU Sellers Need Independent Storage in Germany Now
FBA Prep Germany
We streamline your German Amazon operations by handling FBA prep, managing removal orders, and forwarding shipments to any German Fulfillment Center for FBA and Vendor accounts.
The world's largest parcel carrier just made a move that should change how every European Amazon seller thinks about their supply chain. UPS has formally agreed to cut its Amazon delivery volume by more than 50% by mid-2026 — a structural break with a partnership that has lasted nearly three decades. This isn't a routine contract renegotiation. It's a signal that the logistics ecosystem built around Amazon is cracking at the seams, and the cracks are widening fast.
For EU sellers shipping into Amazon Germany and other European marketplaces, the timing matters. As carriers pull back, Amazon is doubling down on its own in-house delivery network across Europe. That leaves sellers squeezed between two forces reshaping the logistics landscape simultaneously — and it makes the case for independent, pre-Amazon storage in Germany stronger than it has ever been.
Why UPS Walking Away from Amazon Is a Bigger Deal Than It Looks
UPS announced it will reduce the Amazon volume it delivers by more than 50% by the second half of 2026 under an agreement reached between the two companies. The reason is straightforward and blunt: CEO Carol Tomé stated that Amazon is UPS's largest customer, but not its most profitable one, adding that its margin is "very dilutive" to the domestic business.
This isn't a surprise to anyone watching the space closely. In 2019, FedEx ended its contract with Amazon entirely — a move that signalled growing tension between the e-commerce giant and traditional carriers as Amazon's in-house logistics capabilities expanded. UPS watched that play out and spent years quietly reducing its Amazon exposure. Now it's accelerating the process.
UPS CFO Brian Dykes, who has worked with Amazon for over a decade, explained that over time the two companies' strategies diverged — which led UPS to step back and reassess where it truly adds value. Amazon, he noted, built fulfillment centers optimised for short-haul, last-mile delivery, while the UPS network is designed for long-haul and complex logistics.
The Numbers That Tell the Story
The financial scale of this shift is significant. Amazon contributed just 11% of UPS's $91.1 billion revenue in 2024, down from 13.3% in 2020. Even with prior efforts to reduce Amazon-related volumes, around 20% to 25% of UPS's US network volume still comes from Amazon. Cutting that by half is not a minor portfolio adjustment — it is a fundamental restructuring of one of the most important logistics relationships in global commerce.UPS plans to shutter 164 operations and close 73 buildings by the end of June 2025. The company also expects to reduce operational hours by about 25 million.
Where UPS Is Betting Its Future Instead
The pivot away from Amazon isn't a retreat — it's a reallocation. UPS is transforming its US operations to focus on market segments where it can add the most value, doubling down on higher-margin areas like small and midsized businesses, healthcare logistics, and B2B delivery. For EU sellers, this is the important subtext: the major carriers are now actively courting SMBs and marketplace sellers, not big platforms. The logistics infrastructure that once orbited Amazon is now repositioning to serve independent merchants directly.
Where UPS Is Betting Its Future Instead
The pivot away from Amazon isn't a retreat — it's a reallocation. UPS is transforming its US operations to focus on market segments where it can add the most value, doubling down on higher-margin areas like small and midsized businesses, healthcare logistics, and B2B delivery. For EU sellers, this is the important subtext: the major carriers are now actively courting SMBs and marketplace sellers, not big platforms. The logistics infrastructure that once orbited Amazon is now repositioning to serve independent merchants directly.
Amazon Is Building Its Own Walls — And They Are Getting Higher
While UPS is stepping back, Amazon is accelerating in the opposite direction. In 2025, Amazon accelerated its European growth strategy, ramping up investments in cloud infrastructure, fulfillment, same-day delivery, and marketplace logistics. This is not expansion for its own sake. Amazon is systematically replacing its reliance on third-party carriers with proprietary infrastructure — and that has direct consequences for how sellers can manage inventory.
Amazon invested over €38 billion in the EU in 2024 as part of more than €225 billion committed since 2010. In Germany alone, Amazon has allocated €17.8 billion to expand its operations, including new fulfillment centers. Amazon has also committed more than €700 million in technology innovations across its European delivery station network between 2021 and the end of 2025.
What this means for sellers is that Amazon is not becoming more flexible — it is becoming more automated, more data-driven, and more rigid in how it manages inventory flow through its fulfillment centers. As that network grows, so does Amazon's ability and inclination to enforce strict rules on what comes in, when, and how much.
FBA Capacity Limits Are Tightening, Not Relaxing
The practical impact of Amazon's network expansion on sellers is not convenience — it is constraint. Amazon has introduced ASIN-level restrictions that cap how many units of a particular product a seller can send, which reverses more flexible policies from earlier periods and adds another layer of planning complexity.
Amazon maintained FBA capacity at roughly five months of expected sales volume for mid-2025, reduced from six months. Sellers who experienced cuts of up to 75% in capacity during earlier months continued to face restricted capacity in the following period. Critically, if a seller hits their limit, Amazon simply will not allow new FBA shipments to be created
IPI Scores and the Performance Trap
Amazon ties inventory access directly to seller performance metrics, creating a system where your right to hold stock inside Amazon's network depends on how well your current stock is already selling. Amazon continues to tie allowed storage space to performance metrics like the Inventory Performance Index (IPI) score, sales velocity, and how efficiently inventory is managed. Slow-moving or excess inventory can hurt usable capacity — aging stock can block the ability to send in best-sellers.
This is the trap that many EU sellers fall into: the products that need more time to sell are the ones that cost you the capacity to replenish the products flying off the shelves. There is no good workaround inside Amazon's own ecosystem. The workaround is outside it.
Send-In Windows and Seasonal Deadlines
Even for sellers with healthy IPI scores, Amazon enforces strict inbound deadlines around peak periods. Amazon has limited slots to accept shipments in November, focusing instead on processing customer orders. Shipments, especially palletised ones, are processed more slowly during peak season. Missing these windows means missing peak sales events — Prime Day, Black Friday, Q4 — entirely. For EU sellers shipping from outside Europe, this risk is compounded by longer supply chains and customs clearance timelines.
The Case for Independent Storage in Germany: 4 Reasons That Matter Now
The combination of a decentralising carrier ecosystem and a more rigid Amazon network creates a clear strategic argument for pre-Amazon storage in Germany. Here is why that argument is stronger today than it has ever been.
Reason 1: You Need a Buffer Between Your Supply Chain and Amazon's Rules
When your entire stock is inside Amazon's fulfillment network, every policy change hits you directly and immediately. There is no buffer, no flexibility, no second option — and the consequences arrive faster than most sellers expect.
An independent 3PL warehouse in Germany changes that equation entirely. By storing inventory outside Amazon, sellers can:
- Send stock to FBA gradually, in line with available capacity limits
- Respond to unexpected sales surges without waiting for a new send-in window
- Fulfill orders via FBM directly from the warehouse if FBA capacity is frozen
- Rebook rejected shipments without waiting weeks for a removal order
This is not just a logistics convenience — it is a resilience strategy. A buffer stock facility outside Amazon's network means that a sudden policy shift, a rejected shipment, or a temporary capacity freeze does not translate directly into lost sales or stock-out penalties. Germany is the right location for this buffer: with 20 Amazon fulfillment centers across the country, holding stock nearby gives sellers a genuine speed advantage when capacity does open up.
Reason 2: You Protect Yourself from Amazon's Cost Escalation
Amazon's storage economics are designed to push sellers toward efficient inventory turnover. That is rational from Amazon's perspective, but it creates serious cost risk for sellers who hold seasonal products, slower-moving SKUs, or bulk stock imported in full containers. Pre-Amazon storage in Germany sidesteps this problem entirely. Rather than sending a full shipment into Amazon and watching fees accumulate, sellers can:
- Hold bulk inventory at a third-party warehouse at a fraction of FBA storage costs
- Replenish Amazon on a rolling basis, aligned with actual sales velocity
- Avoid aged inventory surcharges by keeping slow movers outside Amazon's network
- Protect their IPI score by maintaining a leaner, higher-performing FBA footprint
The result is a dramatically more cost-efficient operation. Amazon's Low Inventory Level Fee penalises sellers for sending too little; its aged inventory surcharges penalise them for sending too much. The only rational response is to manage FBA levels precisely — and that requires a staging point outside Amazon where bulk stock can be held and released on your terms, not Amazon's.
Reason 3: Your Logistics Stack Should Not Have a Single Point of Failure
The UPS-Amazon story is ultimately about strategic dependency. UPS built a business where one customer represented 20–25% of its domestic network volume, and when the margins proved insufficient, the restructuring was painful and costly. EU sellers who build their entire logistics operation inside Amazon's fulfillment network are making the same structural mistake at a smaller scale.
Independent storage in Germany introduces the redundancy that protects against the most common failure scenarios:
- FBA capacity freeze before Q4? Buffer stock keeps you trading while competitors go out of stock
- Amazon restricts your send-in window? Your warehouse holds the inventory until the window reopens
- Policy change affects reimbursements or inbound requirements? You have time to adapt without a stockout
- New sales channel opportunity? Your off-Amazon stock can be redirected without touching FBA inventory
A single-channel logistics strategy has no fallback. Stock outside Amazon's network can be used for FBM, redirected to other European marketplaces, held through slow periods without surcharges, and shipped to Amazon the moment capacity opens. The optionality alone justifies the model.
Reason 4: Your Prep Quality Determines Whether Stock Gets Accepted at All
Amazon's inbound requirements have grown significantly stricter over the past two years. Label placement, poly-bagging standards, carton weight limits, FNSKU accuracy — each of these is a potential rejection point, and a single non-compliant shipment can result in delays, re-prep fees, or inventory being returned at the seller's cost. Not every warehouse that offers storage also understands these requirements in depth.
A specialist FBA prep center in Germany eliminates these risks before goods ever reach a fulfillment center. Key advantages include:
- Labelling and barcoding completed to current Amazon inbound standards
- Poly-bagging, bundling, and packaging checks carried out before dispatch
- Shipment plans created and managed by staff familiar with Amazon's requirements
- Fast correction of supplier errors without the stock leaving the country
This matters most during peak periods, when Amazon's inbound processing slows down and rejected shipments have nowhere to go. Having a good prep partner in Germany is the difference between a smooth Q4 and an expensive scramble.
Germany as a Logistics Hub: Why Location Is Part of the Strategy
Choosing independent storage is one decision. Choosing where that storage sits is another — and for EU sellers targeting Amazon's European marketplaces, Germany is not just a convenient option. It is the most strategically positioned country on the continent for this exact model.
Central Geography That Cuts Transit Times Across Europe
Germany sits at the centre of European logistics infrastructure, bordered by nine countries and connected to every major EU market by road, rail, and air. For sellers fulfilling orders across Amazon.de, Amazon.fr, Amazon.it, Amazon.es, and Amazon.nl from a single inventory pool, a warehouse in Germany minimises the distance — and therefore the time and cost — of reaching any of those marketplaces. When Amazon opens a send-in window, proximity matters. A shipment dispatched from a German prep center can reach an Amazon fulfillment center in Germany within 24 hours, and most other major EU fulfillment centers within two to three days. That speed advantage disappears entirely if your buffer stock is sitting in a warehouse in Asia or even in the UK, where post-Brexit customs clearance adds another variable to every inbound shipment.
Access to Amazon's Largest European Marketplace
Amazon Germany — Amazon.de — is consistently the largest Amazon marketplace in Europe by revenue. Amazon Germany has 20 fulfillment centers across the country, more than any other single European market, which means faster Prime delivery speeds for customers and more predictable inbound logistics for sellers. Holding inventory in Germany means your stock is already inside the same country as Amazon's densest European fulfillment network. This reduces inbound transit risk, lowers the chance of cross-border delays affecting your restock timing, and keeps your supply chain aligned with where the majority of your European sales volume is likely to come from. For sellers who prioritise Amazon.de as their primary EU channel, co-locating buffer stock in Germany is simply the most direct path between supplier and customer.
Customs Clearance and Import Compliance Built Into the Process
For sellers importing goods from outside the EU — whether from China, Southeast Asia, or elsewhere — Germany's position as a major entry point for European imports adds another layer of practical value. Goods arriving by sea freight typically enter Europe through major ports, and a prep center in Germany can receive, clear, and process those shipments without requiring onward transport to another country before Amazon prep work begins. This matters because customs delays are one of the most common causes of missed FBA send-in windows. When your prep partner is already located in the import country, the chain from port to prep to Amazon is shorter, simpler, and less exposed to the kind of delays that cost sellers their peak-season slots. FBA Prep Germany handles inbound shipments from non-EU suppliers as part of its standard workflow, including support with customs documentation and VAT compliance — removing one of the most administratively complex parts of the EU import process from the seller's plate entirely.
What This Means for Your Germany Strategy Right Now
The logistics landscape around Amazon is not static, and the shifts happening right now — a major carrier retreating, Amazon's own network expanding — will not reverse. EU sellers who adapt early gain a structural advantage over those who wait until a capacity freeze or a policy change forces their hand.
The strategic case is clear. Hold your bulk inventory in an independent warehouse in Germany. Replenish Amazon on a rolling basis, in line with your capacity limits and sales velocity. Keep your FBA footprint lean, your IPI score healthy, and your buffer stock accessible. If Amazon restricts your send-in window, you still have stock. If a shipment is rejected, you can rebook it without waiting weeks for a removal order. If another channel offers a sales opportunity, you can fulfill it from your pre-Amazon stock without touching your FBA inventory at all.
This is what supply chain resilience actually looks like in practice — not a theoretical risk framework, but a concrete operational structure that removes Amazon as a single point of failure in your business.
FBA Prep Germany, part of the FLEX. network, offers pre-Amazon storage, FBA prep, and forwarding to Amazon fulfillment centers across Germany and wider Europe. Whether you are shipping sea containers from Asia, consolidating across EU markets, or looking to reduce your FBA storage costs ahead of Q4, the infrastructure is already in place.
Ready to build your buffer? Get a quote from FBA Prep Germany and start shipping smarter.
