According to a recent research report from Bernstein, the investment firm believes Amazon.com, Inc. efforts to reduce dependence upon both UPS and FedEx by moving its reliance to USPS may not be a viable idea. For USPS to support the online retail giant’s growing demand, it would have to invest heavily in its networks and fleets or raise its price, which it can’t afford.
The jewel of FedEx’s acquisition of TNT Express this week is a European road network linking 40 countries, but the heart of FedEx remains in Memphis.
No immediate impact was foreseen on FedEx’s Memphis area workforce of more than 30,000, but the company’s continued growth as a force in world commerce would have a ripple effect here. FedEx is the area’s largest private employer.
After gaining approval from regulatory authorities across four continents, FedEx Corporation has finally acquired TNT Express for €4.4 billion for all of its issued and outstanding ordinary shares as well as all American Depositary Receipts (ADR). The announcement also marks the beginning of TNT’s integration into FedEx’s Ground operations.
“Deals to lease 20 freighter aircraft from Air Transport Services Inc. and 20 more from Atlas Air Worldwide will give Amazon a fleet with an aggregate payload capacity roughly one-fifth that of FedEx and about one-fourth that of UPS,” Moody’s analysts wrote. “This would enable the company to move more than 20%, and possibly as much as 30%, of its volumes with its own fleet.”
Does this spell doom for UPS and FedEx? Not likely.
While the shippers will take a hit on the top line, profits are unlikely to suffer too much as Amazon is actually a very low margin customer because of the enormous discounts it gets.
A California judge Friday held off preliminary approval on a $1.6 million settlement to resolve putative class action claims that United Parcel Service Inc. shortchanged 32,000 seasonal workers on pay and breaks, asking for details on an amended complaint filed by the workers.
Los Angeles Superior Court Judge John Shepard Wiley continued Friday’s preliminary approval hearing to July 12 and asked the parties for more information on several concerns, including the amended complaint the workers brought to court on Friday.