Trouble ahead

Discussion in 'FedEx Discussions' started by Purple no more, Oct 24, 2015.

  1. Purple no more

    Purple no more New Member

    I just read an article about how Amazon is going to be delivering their own product and cutting out third party vendor, FedEx and UPS. I wonder what the powers that be think about that?!
  2. OUMick

    OUMick Member

    I don't see how that is possible. At least not in the near future.

    If the only way for Fedex to make money on ground is to have contractors, how will it benefit Amazon to hire their own fleet?
  3. It will be fine

    It will be fine Well-Known Member

    They are using contractors too. Amazon has already moved their smaller volume to the post office. They might start delivering their own mid size boxes. They'll still keep their huge stuff in our system.
    They've been on the way out for years. Overall ecommerce growth should continue to make up for the loss of Amazon volume.
  4. silenze

    silenze Lunch is the best part of the day

    Amazon offers free same day or next day shipping in 16 major citys. This service is free for Amazon Prime members on $35+ orders
    This effectively already cuts out ups and fedex in most major markets

    Here is a list of the included cities:

    - New York City (including Northern New Jersey)
    - Los Angeles
    - Boston
    - Philadelphia
    - Baltimore
    - Washington D.C.
    - Atlanta
    - Indianapolis
    - Chicago
    - Dallas
    - Phoenix
    - San Diego
    - San Francisco
    - Seattle
    - Orlando
    Last edited: Oct 24, 2015
  5. dex 84

    dex 84 Active Member

    I think if they try to cover the whole United States with their own new network that they're in for a rude awakening. Major cities is one thing but if they want to have their own drivers delivering in every zip code in the nation it's going to get costly very fast and I think it'll be a major headache for them compared to just using the established networks.
  6. Purple no more

    Purple no more New Member

    There was rumors a couple of years ago about Amazon going out and buying a delivery company. And at one point FedEx was thought to be a target. That's why they did the stock buy back. I think that it could be a real threat to the company.
  7. Fred's Myth

    Fred's Myth Active Member

    They are utilizing an Uber/Lyft style of operations, dangling the promise of "$18-25 per hour" to those foolish enough to believe that that's possible. Conveniently omitted are the associated expenses of using your personal vehicle in a commercial endeavor, much less the personal liability factor. I believe they are counting on an endless supply of fools. They might be right.
  8. Cactus

    Cactus Just telling it like it is

    Amazon will find out very quickly how much more of a headache running a delivery service is gonna be especially if they venture into rural America. The major cities are gonna be enough of a challenge.
  9. barnyard

    barnyard KTM rider Staff Member

    That is not their plan. Their operating plan is to deliver to major metros that have warehouses nearby.

    The rude awakening is coming from mid size package companies that are not interested in handling Amazon volume as there is no profit in it. The regional based in my area has told them that they would carry their volume at their retail price list (which is higher than the deal they get through us.)

    I doubt that Amazon will go away entirely for either UPS or FE. I suspect that volume growth from them will slow down and maybe even shrink in some markets (currently seeing some urban volume in our center going away but the rural volume is staying the same.)
  10. MrFedEx

    MrFedEx Engorged Member

    Amazon is notoriously cheap. Considering the fact that we move diapers and popcorn SDR in large amounts tells me that their FedEx discount is huge. Also, Amazon is never going to have drone delivery. All of the information coming out about near misses with aircraft and forthcoming FAA regulation will kill their program.
  11. dezguy

    dezguy Well-Known Member

    I don't really see how this means trouble ahead. As it is now, FedEx and UPS are moving Amazon stuff for pennies per package, sometimes even stuff at a loss.
  12. rod

    rod retired and happy

    Don't fall for all that BS. The article was probably written by the same person who believes drivers will become obsolete and packages will be delivered by drones. Look around---where are the jet powered flying cars and hover boards predicted years ago?
  13. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Our center manager told us the other that Amazon accounts for 7% of our revenue. Imagine how much more it would be if not for the huge discount. Losing Amazon in its entirety would be disastrous.
  14. bacha29

    bacha29 Well-Known Member

    A while back Amazon said that their strategy included building warehouses in every shipping zone in the country so that they only had to pay for shipping in that one zone. If so it will be a very marginal box for who ever wants the business. Some of the things they are talking about might work in the metro areas but not out in the ching weeds.
  15. Cactus

    Cactus Just telling it like it is

    I don't think so. The profit margin on that stuff isn't very good coupled with the fact that it's mostly residential deliveries we're talking about with many customers in the outlying areas where retail stores are few and far between.
  16. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    If there were no corresponding volume gain in other areas, our center would easily lose 3-4 routes, if not more, if amazon were to completely go away. We only run 23-28 runs on average per day.
  17. ILuvPandas

    ILuvPandas New Member

    In Massachusetts they have opened 2 of their own distribution centers & hired drivers (contracted)for like $100 bucks a day
    Amazon has a bunch of job listings on
    Our Saturday volume has definitely gotten lighter & it seems P2 volume is going down during the week
    I do a night route so it won't affect my regular pickups
  18. Route 66

    Route 66 Throbbing Member

    Can a person even live in Massachusetts on a hundred bucks a day?
  19. TheJackal

    TheJackal Active Member

    If you had no job, you'd find a way.
  20. dex 84

    dex 84 Active Member

    Just wait until this endless supply of fools start rushing around trying to make that $25/hour.