Navigating UPS Disruptions: What Shippers Need to Know in Early 2026

The logistics landscape is undergoing significant turbulence as UPS advances its "Network of the Future" initiative amid sweeping changes in U.S. trade policy.

Recent reports highlight major disruptions, including the seizure of approximately $32 million in undeliverable packages following a major hub closure, widespread disposals due to customs compliance issues, and ongoing facility shutdowns.

These developments are creating challenges for shippers, particularly those reliant on international e-commerce and small-parcel imports.

Key Disruptions at UPS

• Hub Closures and Package Seizures: UPS has closed numerous facilities as part of a multi-billion-dollar network overhaul aimed at consolidation and automation. One significant action involved seizing and writing off $32 million in stranded international shipments after shutting down a key sorting hub. This has left thousands of packages undeliverable, with limited recourse for senders or recipients.

• Customs "Purgatory" and Disposals: The elimination of the de minimis exemption (previously allowing low-value imports under $800 to enter duty-free with minimal paperwork) has led to a surge in formal customs clearances. As a result, packages lacking proper documentation are piling up in warehouses. UPS policy involves multiple contact attempts before disposal, but the scale has resulted in thousands of shipments—including holiday orders—being destroyed or written off to comply with regulations.

• Reported Incinerations: During the peak holiday season, reports emerged of UPS incinerating hundreds of thousands of parcels (figures around 320,000 cited in some accounts) to clear space and address backlogs. While framed as a regulatory necessity, this has eroded customer trust and highlighted the human impact of systemic delays.

• Job Cuts and Facility Reductions: UPS is implementing deep cost-cutting measures, including the elimination of tens of thousands of positions and the closure of dozens of facilities nationwide. Local impacts are evident, such as the upcoming January 2026 shutdown of the Kinston, North Carolina, center. These changes aim to create a leaner, more automated operation but are contributing to short-term capacity strains.

Compounding these issues are heightened enforcement against counterfeits and the broader shift away from direct-to-consumer low-value imports, forcing merchants to rethink routing and compliance strategies.

Implications for Your Supply Chain

For businesses depending on UPS for parcel, freight, or international shipping, these disruptions translate to:

• Increased delays and potential loss of goods.

• Higher costs from tariffs, duties, and rework.

• Reduced reliability during peak periods.

• Risks to customer satisfaction from missed deliveries or destroyed orders.

In a competitive e-commerce environment, such volatility can directly affect margins and reputation.

How Gain Consulting Can Help

At Gain Consulting, we specialize in optimizing logistics networks to withstand carrier disruptions and policy shifts. Our services include:

• Carrier diversification and contract negotiations to reduce reliance on any single provider.

• Customs compliance audits and process improvements to minimize disposal risks.

• Route and mode optimization for cost savings and resilience.

• Contingency planning for network changes and tariff impacts.

We guarantee measurable improvements in effort, time, and cost—helping you turn challenges into competitive advantages.

Contact Gain Consulting today to discuss how we can fortify your supply chain in this evolving landscape. Let's #GainAnAdvantage together.