Is Amazon preparing to dump FedEx and UPS?
Depending on where you live and work, you may have noticed that more items ordered from Amazon.com are being delivered by white trucks with the Amazon logo on them. It’s not news that Amazon has been gradually expanding its own delivery capacity to reduce its reliance on shipping service providers FedEx, UPS and the U.S. Postal Service. Now, it seems, Amazon management thinks not only can it do a better job delivering its own packages, but those shipped by others as well.
Amazon, which took a 25 percent stake in the French delivery company Colis Privé, is getting ready to acquire the rest of the business. While Amazon refused comment on the report, which first appeared in the French newspaper Le Figaro, a spokesperson for Colis Privé said the company would continue to develop its “commercial portfolio” and would not solely deliver packages for Amazon.
John Haber, CEO of Spend Management Experts, a supply chain consulting firm, told USA Today that taking a full stake in Colis Privé is indication of Amazon’s intent to compete in the European parcel business. He expects Amazon to do the same in the U.S., either on its own or through the acquisition of a regional carrier.
According to an article on The Motley Fool, Amazon has been looking for the means to improve on-time deliveries following the problems experience in the run-up to Christmas in 2013. Beyond that, the retailer is also looking to get a handle on cost control. In 2014, Amazon spent over $3 billion on shipping costs, and that number jumped another 30 percent over the first nine months of 2015. The same piece said the U.S. Postal Service handles about 35 percent of Amazon’s deliveries, followed by UPS (30 percent), regional shippers (18 percent) and FedEx (17 percent).
- Amazon poised to take on UPS, FedEx in delivery business – The Seattle Times (tiered sub.)
- Amazon Plans Big Acquisition in Push to Take On FedEx, UPS – Fortune
- Amazon buys a shipping company. Can it compete with FedEx, UPS? – The Christian Science Monitor
- Amazon quietly builds its own shipping company – USA Today
- Is Amazon.com About to Take on FedEx and UPS? – The Motley Fool
Does it make business sense for Amazon to handle all (or nearly all) of its deliveries? Do you think an expansion of Amazon’s capacity will result in the company eventually competing directly with FedEx, UPS and the USPS to deliver packages shipped by other companies?