Amazon exclusively going to UPS?

['Lord Brown's bidding']

They've

Amazon has already begun to build its own delivery network, and it's not just to deliver their own stuff. They will be directly competing with everyone else in the delivery business.

They have a long way to go before they are even a league below FedEx and UPS. Who are the shippers that will use Amazon's service? They are in competition with almost everyone.

Amazon, last I heard, makes up 15-17% of UPS volume. That's substantial, but it won't break UPS if they leave. Other shippers might be wooed back since UPS can offer better, more efficient service given all the improvements made to accommodate Amazon, but without them clogging up the system. Some may not know, but in addition to Amazon Target, Costco and Walmart asked for UPS to begin a Saturday ground operation. Walmart right now primarily uses FedEx Ground, but let's see what happens when UPS' Saturday Ground operation stabilizes.

In addition,there are other shippers out there who will probably expand shipping through UPS or even be attracted to for the first time once Saturday Ground begins, let alone other consumer benefits like being able to track one's package in real time. UPS already offers this to MyChoice customers on Air products,and with the preload moving to scan every package loaded onto cars the infrastructure is being put in place to expand this.

Amazon has a long way to go.

 

[UpstateNYUPSer(Ret)]

Amazon has already begun to build its own delivery network, and it's not just to deliver their own stuff. They will be directly competing with everyone else in the delivery business.

That's untrue.

 

[worldwide]

They've

They have a long way to go before they are even a league below FedEx and UPS. Who are the shippers that will use Amazon's service? They are in competition with almost everyone.

Amazon, last I heard, makes up 15-17% of UPS volume. That's substantial, but it won't break UPS if they leave. Other shippers might be wooed back since UPS can offer better, more efficient service given all the improvements made to accommodate Amazon, but without them clogging up the system. Some may not know, but in addition to Amazon Target, Costco and Walmart asked for UPS to begin a Saturday ground operation. Walmart right now primarily uses FedEx Ground, but let's see what happens when UPS' Saturday Ground operation stabilizes.

In addition,there are other shippers out there who will probably expand shipping through UPS or even be attracted to for the first time once Saturday Ground begins, let alone other consumer benefits like being able to track one's package in real time. UPS already offers this to MyChoice customers on Air products,and with the preload moving to scan every package loaded onto cars the infrastructure is being put in place to expand this.

Amazon has a long way to go.

If Amazon left UPS entirely, it would reduce revenue by about 1.67% so Amazon is only a small part of overall UPS revenue. UPS is well diversified. The margin on Amazon shipments is likely pretty small as well. The big losers if Amazon were to pull volume from UPS would be drivers, preloaders and local sorters with low seniority. UPS as a corporation would continue to operate just fine but with the volume reduction would come a reduction in some jobs. I've read in the past that UPS says 40 new international packages equals one new job. Not sure how many ground packages equals a new job. If it's 100 or 150 ground packages that equals a new job, losing the volume from Amazon would certainly mean a reduction in jobs at UPS.

"Stitching together a full-fledged logistics network could give Amazon a piece of a world-wide delivery market that, according to financial services firm Robert W. Baird, generates roughly $400 billion in annual revenue. It could also damage its relationships with UPS and FedEx. Amazon contributes around $1 billion to UPS’s revenue, according to people familiar with the matter. Perhaps more important, the retail giant’s heft helps both UPS and FedEx to be more cost effective by allowing drivers to drop off more packages in the same areas. If Amazon pulls too much business from the delivery giants, the carriers could respond by eliminating certain volume discounts."

Amazon’s Newest Ambition: Competing Directly With UPS and FedEx

 

[BROWNCAT]

From my point of view the big threat from amazon to UPS, FedEx, USPS and DHL its not the volume that we could/will loss from them, its the volume from other companies that they will try to take away from us...

 

['Lord Brown's bidding']

If Amazon left UPS entirely, it would reduce revenue by about 1.67% so Amazon is only a small part of overall UPS revenue. UPS is well diversified. The margin on Amazon shipments is likely pretty small as well. The big losers if Amazon were to pull volume from UPS would be drivers, preloaders and local sorters with low seniority. UPS as a corporation would continue to operate just fine but with the volume reduction would come a reduction in some jobs. ."

Amazon makes up little of UPS Corp's revenue because UPS is more than just small package, whose volume is made up of the percentage of packages mentioned. UPS Logistics, UPS Supply Chain Solutions, UPS Airlines, UPS Freight, etc. have little to do with Amazon if anything at all.

Small package would feel the sting, but it would be a sting, not a crippling injury or a even a bad wound.

 

['Lord Brown's bidding']

From my point of view the big threat from amazon to UPS, FedEx, USPS and DHL its not the volume that we could/will loss from them, its the volume from other companies that they will try to take away from us...

Like who? Who will give Amazon their business, knowing Amazon will take some of that revenue to prop up their online store, even indirectly, allowing them to be an even stronger competitor?

 

[BROWNCAT]

Like who? Who will give Amazon their business, knowing Amazon will take some of that revenue to prop up their online store, even indirectly, allowing them to be an even stronger competitor?

check the story of Amazon Web Services, Started renting spaces at other providers, then developed their own servers, and finally grow their much needed capacity by renting out overcapacity to others (including some potential competition). This is their modus operandis, Mr. Besos is a very smart and a very machiavellian person. But what do I know... This is just me talking nonsenses on a saturday afternoon with a couple beers in my brain

 

['Lord Brown's bidding']

check the story of Amazon Web Services, Started renting spaces at other providers, then developed their own servers, and finally grow their much needed capacity by renting out overcapacity to others (including some potential competition). This is their modus operandis, Mr. Besos is a very smart and a very machiavellian person. But what do I know... This is just me talking nonsenses on a saturday afternoon with a couple beers in my brain

I have heard of the success of Amazon Web Services before, specifically in relation to the topic at hand. Different industries, different demands, different barriers of entry. I'm more worried Amazon may buy UPS or FedEx than them developing their own network.

 

[UpstateNYUPSer(Ret)]

From my point of view the big threat from amazon to UPS, FedEx, USPS and DHL its not the volume that we could/will loss from them, its the volume from other companies that they will try to take away from us...

They ARE NOT going after other volume!

 

[What'dyabringmetoday???]

They ARE NOT going after other volume!

Lol

 

[Mugarolla]

Amazon has already begun to build its own delivery network, and it's not just to deliver their own stuff. They will be directly competing with everyone else in the delivery business.

You do realize that DHL tried that years ago. They spent billions upon billions starting a ground service. They ended up cutting their losses and gave up.

I see Amazon trying to deliver more of their own stuff, but to start a for profit delivery business to compete with UPS, FedEx, DHL, USPS, etc, don't count on it.

 

[Orion inc.]

You do realize that DHL tried that years ago. They spent billions upon billions starting a ground service. They ended up cutting their losses and gave up.

I see Amazon trying to deliver more of their own stuff, but to start a for profit delivery business to compete with UPS, FedEx, DHL, USPS, etc, don't count on it.

Retailers in direct competition with Amazon are not going to hand over valuable customer information and the responsibility of their logistics to their biggest competitor.

Amazon is dreaming in that aspect. Most big companies in retail are looking for ways to outdo Amazon.

 

[Foamer Pyle]

You do realize that DHL tried that years ago. They spent billions upon billions starting a ground service. They ended up cutting their losses and gave up.

I see Amazon trying to deliver more of their own stuff, but to start a for profit delivery business to compete with UPS, FedEx, DHL, USPS, etc, don't count on it.

DHL never had the infrastructure that Amazon has.

 

[YeeYee]

I wonder if UPS will cut ties with the USPS (surepost) and just deliver the packages ourselves if Amazon were to get up and rolling?

 

[IVE GOTTA PACKAGE 4U]

I wonder if UPS will cut ties with the USPS (surepost) and just deliver the packages ourselves if Amazon were to get up and rolling?

No

 

[FrigidFTSup]

DHL never had the infrastructure that Amazon has.

Sure they did. The air infrastructure they are using is literally the same one DHL used. The company that flies their jets and processes their volume at the airports is the same exact airline DHL contracted (and still contracts) to do all their air as they couldn't own an airline as a foreign company.

 

[FrigidFTSup]

I wonder if UPS will cut ties with the USPS (surepost) and just deliver the packages ourselves if Amazon were to get up and rolling?

Why would we? It's more profitable to let USPS do it.

 

[UpstateNYUPSer(Ret)]

I wonder if UPS will cut ties with the USPS (surepost) and just deliver the packages ourselves if Amazon were to get up and rolling?

Amazon is not our only Surepost customer.

 

[UpstateNYUPSer(Ret)]

Why would we? It's more profitable to let USPS do it.

At least once a week I will deliver a Surepost only to have the consignee come running to say that it's not theirs. The look on their faces when I tell them to read a bit further down the label is priceless.

 

[FrigidFTSup]

At least once a week I will deliver a Surepost only to have the consignee come running to say that it's not theirs. The look on their faces when I tell them to read a bit further down the label is priceless.

We get concerns all the time asking why it was delivered to the post office. Customer service doesn't ever seem to understand either.