FedEx and UPS announced on April 28 that they will refund tariffs to customers as the U.S. government begins to return illegally collected levies under the International Emergency Economic Powers Act (IEEPA) tariffs.
The refund process is being handled through the newly launched Consolidated Administration and Processing of Entries (CAPE) platform, which went live on April 20. Importers of record and their authorized brokers must submit claims through CAPE, and refunds are expected to be issued electronically via ACH within 60 to 90 days after claim approval. The refunds apply only to IEEPA tariffs; other tariff categories such as Section 301, 232, and AD/CVD are not affected.
The move will reduce the revenue that FedEx and UPS collect from customers, with UPS having collected roughly $5 billion in tariffs in the prior year. While the refunds lower the carriers’ top line, they also improve customer relations and reduce the cost burden on shippers, which could translate into higher customer retention and potentially new business.
UPS reported Q1 2026 results with consolidated revenue of $21.2 billion, down 1.6 % year‑over‑year, and adjusted diluted EPS of $1.07, a 28 % decline from $1.49 in Q1 2025. Operating margin contracted to 6.2 % from 8.2 % in the prior year, largely due to $350 million in transitional costs associated with network reconfiguration and efficiency initiatives. Investors reacted negatively to the margin compression and earnings decline, even though the company reaffirmed its full‑year guidance.
FedEx’s Q1 FY2026 earnings showed revenue of $22.2 billion, up 3 % from the prior year, and adjusted diluted EPS of $3.83, a 6 % increase from $3.60. The Express segment’s margin expanded to 6.0 % from 5.4 %, driven by higher yields and cost savings. FedEx reaffirmed its 2026 revenue growth guidance of 4 % to 6 % and EPS range of $17.20 to $19.00, and investors reacted positively to the earnings beat and forward outlook.
The tariff refund initiative underscores the carriers’ compliance with the Supreme Court’s February 2026 ruling that invalidated the IEEPA tariffs. While customers will benefit from the refunds, the carriers face a temporary reduction in revenue and a shift in cash flow dynamics. The market’s reaction reflects a focus on margin compression for UPS and earnings strength for FedEx, highlighting how regulatory changes can have divergent short‑term financial impacts on similar businesses.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.