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Since 2015, Amazon has set up an internal logistics network that allows it to deliver its own parcels, which will allow the sales giant to save money. It costs Amazon $ 6 to move a box through its own network, versus $ 8 to $ 9 to switch to UPS or FedEx, explains Morgan Stanley's Ravi Shanker.
Some say that Amazon could even open up its scalable package network to manage other customers' goods, competing with pillars like FedEx and UPS.
For years, FedEx CEO and Founder Fred Smith has had a say in describing such a "fantastic" scenario.
"We view Amazon as a great company and service, which are good customers," Smith said at a call for results in December. "We do not consider them competing competitors at this point, for many reasons we think it's unlikely to be the case."
Read more:Goldman Sachs said that Amazon's logistics network did not pose a threat to FedEx or UPS. It needs years of new construction and $ 122 billion to catch up.
He later added, "I do not know what I can say, other than what I just said, I think this company is likely to be" disrupted ", which is happening again and again, for quote a previous statement, is fantastic, so I'll leave it there. "
FedEx's latest financial statements show the company is now humming a different tune
Seven months after being mocked by the idea that Amazon could threaten FedEx, the air cargo giant seems a little shaken up.
In the company's annual report, published on July 16, FedEx mentioned Amazon six times – highlighting this alone in a section called "We are facing intense competition."
"In addition, some large package shippers, such as Amazon.com, develop and implement internal delivery capabilities and rely on independent contractors for deliveries, and may be considered competitors." , says the annual report. "For example, Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles."
Amazon and FedEx did not comment on this story.
This is not the first time that FedEx names the retailer in its annual report, but the parcel company has added more color to Amazon's logistics developments than before. He also stopped referring to Amazon as a "current customer" and rather as a "customer" – perhaps evoking Amazon's dumping of FedEx Express as an airfreight partner in June.
"(I) Customers, such as Amazon.com, are developing or further developing the internal capabilities of the services we provide, which will reduce our revenues and could have a negative impact on our financial condition and results. exploitation, "reads the annual report. "News regarding such developments or extensions could also have a negative impact on the price of our common shares."
Read more: It is becoming increasingly clear that Amazon is currently developing a third-party logistics service to overtake FedEx and UPS, now that Stamps.com has emptied USPS
UPS, FedEx's clbadic rival, was mentioned less once than Amazon. This is all the more striking as the 111-year-old UPS has 564 cargo planes, thousands of facilities and order processing centers around the world and more than 123,000 vehicles.
Amazon, meanwhile, has a logistics network of just four years. By 2021, it will have 70 aircraft and an air hub. Amazon would need $ 122 billion in new investments to catch up with UPS or FedEx, according to a recent Goldman Sachs report.
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