Business Essentials for Professionals


FedEx And UPS Can Have Nightmares Because Of The Delivery Ambitions Of Amazon

FedEx And UPS Can Have Nightmares Because Of The Delivery Ambitions Of Amazon
The ambition that Amazon has been brewing has been obvious for years now. The largest online retailer in the world has set up its own networks of merchandise warehouses and sorting centers for packaging. Transportation of cargo is also done by airplanes and truck trailers that are owned by the company. it obtained permissions to transport its cargo across oceans as well as in many cities where it teamed up with couriers to directly deliver its packages for the doors of the shoppers.
Slowly but surely, the company created its own package delivery system that it uses to not only uses to transport its own packages but is also open for other who intend to transport goods form one point to another. In short, Amazon has also built itself as a package delivery firm.
And this is no secret. Because jet planes cannot be kept hidden even by a secretive company like Amazon. However, there is plausible deniability for Amazon and its courier partners like FedEx with regard to what hey are up to. Amazon executive claim that the trucks, warehouses, airplanes and delivery drivers were created to supplement the current shipping providers when there is demand for enhancement of delivery for Amazon’s clients. This was the answer when questions were asked of the company about whether they intended to become another FedEx or UPS.
However, there is no longer a case for denying the actions because the reasons put forward are not entirely believable. Because it clearly appears that FedEx and UPS would be the next targets for Amazon – either tomorrow or later.
The expenditure for the distribution network of its e-commerce business and its shipping capacity is being increased by Amazon.
According to a Wall Street Journal report, for the first time, there are plans of Amazon to deliver packages for other businesses to be delivered to their customers. To start off, only the city of New York will be able to avail the Amazon delivery system as well as only those businesses that sell their products through Amazon’s e-commerce platform. These are small steps but are symbolically very important. Many believe that this would soon spread to other cities and cater to other types of customers as well. While it is still some time t hat Amazon would be able to manage all of its own deliveries, but this is being viewed as the first step by the company to venture into the business that is dominated by FedEx and UPS.
And when Amazon does that, the onetime bold words from the FedEx Corp.'s CEO would appear to be preposterous. It was about two years ago that speculations about Amazon entering the territory of FedEx was described to be "fueled by fantastical" reports by Fred Smith. "In all likelihood, the primary deliverers of e-commerce shipments for the foreseeable future will be UPS, the U.S. Postal Service and FedEx," Smith said.
While being factually correct, Smith was blindingly wrong. Experts agree that the scope and range of the services offered by UPS, FedEx or the Postal Service is still far away for Amazon’s delivery serviced to achieve because it is time consuming and expensive to build up a global shipping company. it has taken FedEx 47 years while it has been only since 2013 that Amazon has been amassing its own shipping infrastructure.
But amazon appears to be very serious about its ambitions of turning into a delivery company with $13.2 billion being spent by the company for development of warehouses and other logistics for its North America operations only. This figure was obtained from the securities filings of the company where he cash capital spending of Amazon is added with the its additions of physical real estate under leases as well other financing arrangements.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc