UPS AI Strategy: AI Agents in Customs and a Smaller, More Automated Network

UPS uses AI to run a smaller, more automated network and to make shipping simpler for customers. AI agents cleared 90% of dutiable packages entering the US without human review by September 2025, and AI assistants answer customers in more than 20 countries. UPS cut 48,000 positions in 2025 and plans up to 30,000 more in 2026, which it ties to less Amazon volume and automation. It has not linked them to AI. It has published no AI training figures for its 460,000 people.

AI sits inside a cost and network turnaround. CEO Carol Tomé said in June 2026: “After 118 years of reinventing logistics, we have entered a defining moment – using AI to simplify how we work across the enterprise” (UPS release). Simplification is a companywide priority. UPS’s strategy includes a technology pillar called Innovation Driven, and its annual report lists AI among the technologies it relies on (2025 10-K). Tomé insists: “AI isn’t a buzzword at UPS” (June 2026).

The bigger change is the network. In January 2025, UPS said it would cut its Amazon volume by more than half (Spokesman-Review). It completed that reduction and a reconfiguration of its network in June 2026, and moved to a new global operating model in September 2026 (UPS, August 2026).

The focus has four parts.

• Customs and trade: agentic AI in customs brokerage, product classification and digital trade documents (June 2026)
• Customer service: AI assistants in more than 20 countries, AI shipment insights for care teams, and a conversational returns service through Happy Returns (June 2026)
• Network: planning tools that test “what if” scenarios, a digital twin of the global network that updates every 10 minutes, and agentic “control towers” at customer sites. UPS says that “with AI embedded across planning, routing and execution, the network will dynamically adapt” (June 2026)
• Sales: deals scored by generative AI while salespeople negotiate (Supply Chain Dive)

Digital and technology owns AI. Bala Subramanian, who was Chief Digital Officer at AT&T, joined UPS in July 2022 as Executive Vice President and Chief Digital and Technology Officer, a new role reporting to Tomé (Post & Parcel). Mallory Freeman is president of global enterprise data analytics and generative AI (Supply Chain Dive), and UPS named Vikas Sah Vice President of AI and Machine Learning in August 2026 (CDO Magazine). UPS has no chief AI officer. Subramanian describes the approach: “We don’t start with AI and figure out what we have to do. We start with the customer or employee problem we’re solving” (UPS, August 2026).

Automation carries the network.

• Buildings: 127 automated buildings at the end of 2025, with 24 more planned in 2026
• Volume: 66.5% of US volume ran through automated facilities at the end of 2025, with a target of 68% by the end of 2026
• Sensing: RFID labels on 1.3 million packages a day, as UPS moves “from a scanning to a sensing network” (Q4 2025 call)

The workforce is shrinking fast. UPS had about 460,000 employees at the end of 2025, excluding seasonal staff, down from about 536,000 at the end of 2022 (2025 10-K).

• 2024: about 12,000 jobs cut, mostly in management. The finance chief said: “As volume returns to the system, we don’t expect these jobs to come back” (Fortune)
• 2025: 48,000 positions cut, including 14,000 in management (Black Enterprise), a layer we look at in how AI is breaking middle management
• 2026: up to 30,000 operational positions, through attrition and a voluntary separation program for drivers (HR Grapevine)

UPS links these cuts to less Amazon volume, building closures and automation. It has not linked them to AI.

Upskilling is promised, not measured. Freeman says UPS invests in learning programs so employees can use data analytics and AI as their roles change, and Tomé says: “someone’s going to have to oversee the robots.” UPS has published no training figures. Rival FedEx says it runs an AI fluency program for 300,000 employees, and Alan Amling, a former UPS vice president of corporate strategy, says: “They’re spending money on AI systems but not spending the money on change management” (Supply Chain Dive, April 2026). That gap is what decides whether AI training sticks.

Governance sits with the board’s Risk Committee, which oversees strategic risks including AI. UPS’s annual report warns that AI used for internal work could produce “inaccurate outcomes, recommendations or other suggestions based on flaws in the underlying data” (2025 10-K). UPS has published no responsible AI principles.

AI fluency, coded against the Lead with AI Fluency Matrix (September 2026 edition):

• Fluency floor: Not published. UPS describes upskilling programs but has set no standard and published no training or usage figures for its workforce.
• Highest level evidenced: Level 4 (Transforming), company-claimed. Agentic AI in customs brokerage cleared 90% of about 112,000 dutiable packages a day without human review in September 2025, and people handle the cases the system cannot resolve. That is a process AI runs from start to finish, at scale, with a measured result.
• Portfolio design: Operations-first and platform-led. A central digital and technology team builds AI into customs, customer service, network planning and sales, while the workforce side has no published standard.

UPS reports process results, and folds savings into its network program. All figures below are company-claimed:

• Customs: after the US ended duty-free entry for low-value parcels in August 2025, daily packages needing clearance rose from about 13,000 to 112,000. The share cleared without human review rose from about 21% in March to 90% in September 2025, which Tomé credits to agentic AI (PYMNTS). 97% of UPS shipments clear customs on the first day (June 2026)
• Customer service: an AI virtual assistant in 13 languages has cut customer service calls by about 60,000 (August 2026), and UPS aims to support more than 98% of customer service requests through redesigned tracking by the end of 2026 (June 2026)
• Sales: with deals scored by generative AI, Tomé says: “our win rate is higher and our discounting is lower than it was” (2025)
• Savings: $3.5 billion in 2025 from network reconfiguration and its Efficiency Reimagined program (Q4 2025 call), and about $1.8 billion in the first nine months of 2026, with nearly $3 billion expected for the year (October 2026)

The AI share of savings is not reported. UPS gives no figure for how much of its savings come from AI rather than from closing buildings, cutting Amazon volume or automating sorting. Separating them is the step from AI adoption to AI value.

Next markers: the share of US volume through automated facilities at the end of 2026, the 98% customer service target, how many of the 30,000 planned cuts happen, and whether UPS publishes any AI training figures.

Change log

• July 2022: Bala Subramanian joins as Chief Digital and Technology Officer.
• January 2024: UPS cuts about 12,000 jobs, mostly in management.
• January 2025: UPS says it will cut its Amazon volume by more than half.
• September 2025: Agentic AI clears 90% of dutiable US packages without human review.
• January 2026: UPS reports 48,000 fewer positions and $3.5 billion in savings for 2025, and plans up to 30,000 more cuts.
• June 2026: UPS completes the Amazon reduction and sets out its AI initiatives.
• August 2026: Vikas Sah becomes Vice President of AI and Machine Learning.
• September 2026: A new global operating model takes effect.

• Disclosure: 2 of 4. UPS answers where it is going and where it will focus. What it will take is answered in part: it names its leaders and automation plans, but no AI investment or training standard. How it will know is answered in part: it reports process results, and its savings are not split by source.
• Customs is the standout. AI agents clearing 90% of dutiable packages without human review is one of the clearest end-to-end AI processes in the index.
• AI is one lever in a bigger turnaround, next to fewer Amazon parcels, fewer buildings and more automated sorting.
• The workforce is down about 76,000 since 2022, and UPS ties the cuts to its network. It has not linked them to AI.
• The say-do gap is people. UPS says it pairs “the deep expertise of our people with the power of AI,” but has published no training figures for its 460,000 people.
• Watch the workforce plan. The test is whether UPS sets a standard for AI skills as automation grows.

What the numbers show: Revenue fell 12% from 2022 to 2025 and headcount 14%, so revenue per employee rose 3%, to about $193k. UPS cut 48,000 positions in 2025 and plans up to 30,000 more operational cuts in 2026, which it ties to less Amazon volume, building closures and automation and has not linked to AI. These figures do not show that AI caused any change.

Revenue, headcount and revenue per employee, FY2022 to FY2025

• FY2022: $100.3bn revenue, 536,000 employees, $187k per employee
• FY2023: $90.96bn revenue, 500,000 employees, $182k per employee
• FY2024: $91.07bn revenue, 490,000 employees, $186k per employee
• FY2025: $88.66bn revenue, 460,000 employees, $193k per employee

Change, FY2022 to FY2025: revenue down 12%, headcount down 14%, revenue per employee up 3%.

Notes: Revenue is as reported. Headcount is approximate, at year-end, excluding temporary seasonal employees. UPS cut 48,000 positions in 2025, including 15,000 fewer seasonal positions, and plans to cut up to 30,000 operational positions in 2026, tied to lower Amazon volume.

These figures give context on scale and productivity. They do not show that AI caused any change. Sources: UPS 10-K filings.

What is UPS’s AI strategy?

UPS uses AI to simplify how it works and to run a smaller, more automated network. Its main uses are customs clearance, customer service, network planning and sales pricing, as part of a turnaround that also cut its Amazon volume by more than half.

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Who leads AI at UPS?

Bala Subramanian, Executive Vice President and Chief Digital and Technology Officer, leads digital and technology, including AI. Mallory Freeman leads enterprise data analytics and generative AI, and Vikas Sah is Vice President of AI and Machine Learning. UPS has no chief AI officer.

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How does UPS use AI in customs?

UPS says agentic AI in its customs brokerage cleared 90% of about 112,000 dutiable packages a day without human review in September 2025, up from about 21% in March. People handle the cases the system cannot resolve.

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Is UPS cutting jobs because of AI?

UPS cut 48,000 positions in 2025 and plans up to 30,000 operational cuts in 2026. It ties the cuts to less Amazon volume, building closures and automation, and has not linked them to AI.

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Does UPS train its employees in AI?

UPS says it invests in learning programs so employees can use data analytics and AI as their roles change. It has not published a training standard, completion figures or usage data.

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How is this profile put together?

Lead with AI profiles use public sources only, such as annual reports, earnings materials, filings and on-record interviews, dated at the time of writing. AI fluency is coded against the Lead with AI Fluency Matrix. Company figures are marked as company-claimed unless they have been independently verified.