Here's Why UPS Shares Declined by 15% in March

By Lee Samaha – Apr 2, 2026 at 9:39AM ESTKey PointsHigher fuel costs could increase UPS's third-party transportation costs. Trade route disruptions could pressure margins.UPS (UPS 0.29%) shares declined by 15.2% in March, according to data from S&P Global Market Intelligence. While the overall market declined, UPS notably underperformed, raising questions about its full-year guidance. The conflict in the Persian Gulf has significant consequences for UPS' operations and profitability, and it's not just about the impact of rising oil prices on its fuel costs. UPS and the war in the Persian Gulf As previously discussed, when fuel costs rise or fall, UPS adjusts its fuel surcharge and passes along the increases/decreases to its customers. That said, the difference between its fuel surcharges and fuel costs over the last two years has led to a net benefit of $471 million for UPS. ExpandNYSE: UPSUnited Parcel ServiceToday's Change(-0.29%) $-0.28Current Price$97.63Key Data PointsMarket Cap$83BDay's Range$95.52 - $98.8752wk Range$82.00 - $122.41Volume1.1MAvg Vol6.6MGross Margin18.53%Dividend Yield6.70% That said, it would be wrong to conclude that higher fuel costs resulting from the conflict will be a net benefit to UPS this time around. The reality is UPS also purchases transportation from third parties (about 13% of its total costs in 2025), and those third parties will inevitably raise their prices too. Moreover, there's a limit to how much UPS can raise prices before demand destruction sets in. In addition, the Gulf region contains major transportation hubs in Dubai and Saudi Arabia, and there are no no-fly zones across swathes of the Middle East as a result of the conflict. These difficulties are causing logistics companies to overhaul their trade routes, and that's highly likely to lead to increased costs. It's the last thing UPS needs, because the shift in trade caused by the tariffs on China last year put overall margins under pressure, as trade with China to the U.S. is its most profitable route. According to CFO Brian Dykes at a recent Raymond James investment conference, "We see a tremendous amount of growth in China to the rest of the world. The problem is it's about half as profitable, right, as China to the U.S. And so we've got this mix shift that's weighing on margin." A shift in trade routes due to the conflict could further pressure UPS's margins. Image source: Getty Images. What it means for UPS investors UPS will release its first-quarter earnings on April 28, and investors should brace for bad news in its international segment and possibly a downward revision to full-year expectations. Wall Street analysts nudged down their first-quarter and full-year earnings estimates through March. Lowering full-year guidance would be a frustrating development, because management is doing a good job of investing in automation and smart facilities to improve productivity, while downsizing its operations as it winds down less profitable deliveries for Amazon.com. That said, if UPS is forced to lower its full-year guidance, it would imply the company will miss its initial full-year guidance for the fourth year in a row, and the company's insistence on maintaining a $6.56 dividend per share payout when, according to S&P Global Market Intelligence, its earnings per share in 2026 is forecast to be $7.04 per share,, is questionable. Read NextMar 31, 2026 •By Reuben Gregg Brewer2 Magnificent S&P 500 Dividend Stocks Down as Much as 55% to Buy and Hold ForeverMar 30, 2026 •By Keith Speights3 Monster Dividend Stocks to Hold for the Next 10 YearsMar 23, 2026 •By David Jagielski, CPAWill UPS' Move to Reduce Amazon Deliveries Backfire?Mar 22, 2026 •By Reuben Gregg Brewer6 Surprising Stocks Affected by High Oil PricesMar 20, 2026 •By Reuben Gregg BrewerCould Amazon and USPS' Failing Contract Negotiations Help UPS and FedEx?Mar 17, 2026 •By Justin Pope1 Magnificent Industrial Stock Down 58% to Buy and Hold ForeverAbout the AuthorLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.TMFSaintGermainX@LeeSamahaStocks MentionedUnited Parcel ServiceNYSE: UPS$97.63(-0.29%)-$0.28AmazonNASDAQ: AMZN$209.53(-0.49%)-$1.04*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.