Bernstein Relieves Amazon Entry Fears for FedEx Corporation, UPS Investors

Discussion in 'The Latest UPS Headlines' started by cheryl, Feb 10, 2016.

  1. cheryl

    cheryl I started this. Staff Member

    Bernstein Relieves Amazon Entry Fears for FedEx Corporation, UPS Investors - BidnessEtc

    Bernstein analyst David Vermon attributed the beginning of investors’ worries to Amazon.com, Inc.’s (NASDAQ:AMZN) move to set up 23 sortation centers across the country. He assured investors that the company was not entering the ground delivery business, the stronghold for FedEx and United Parcel Service, Inc. (NYSE:UPS).

    Moreover, the bank noted that the e-commerce giant was insourcing postal injection operations, and not entering the ground delivery business. Mr. Vermon further noted that the corporation would have to operate in the densest areas to operate profitably, and carried an overall disadvantage against FedEx and UPS—limiting the marginal risk that Amazon’s moves posed to them. He added: “Amount of marginal Amazon volume at risk is low as expansion constrained by route economics / population density, and daily delivery requirement. As a competing service, low commercial appeal.”