Will Amazon Fire UPS Over Christmas Catastrophe?

Discussion in 'UPS Discussions' started by Returntosender, Dec 30, 2013.

  1. Returntosender

    Returntosender Well-Known Member

    On Christmas, many boys and girls on the nice list failed to receive their presents due to a high volume of orders that United Parcel Service (NYSE:UPS) and FedEx (NYSE:FDX) didn’t have the ability to handle. That incident has resulted in lots of online backlash, Amazon (NASDAQ:AMZN) issuing apologies and $20 gift cards to the affected parties, and speculation that companies like Amazon will soon take delivery into their own hands to avoid future Christmas catastrophes

    http://wallstcheatsheet.com/stocks/will-amazon-fire-ups-over-christmas-catastrophe.html/?a=viewall
     
  2. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Amazon is as much responsible for this regional failure as we are.

    FedEx turned away Amazon volume mid-way through Peak.

    Until such time as Amazon has their own delivery company in place they will have to continue to deal with UPS and FedEx.

    According to MsPacMan, UPS and Amazon signed a 5 year exclusive contract beginning in 2014.
     
    • Like Like x 1
    • Dislike Dislike x 1
    • Agree Agree x 1
    • List
  3. cachsux

    cachsux Wah

    Best of luck to Amazon to do so on their own for 2014. See ya when you come back in 2015.
     
  4. Returntosender

    Returntosender Well-Known Member

    Amazon and Wal-Mart already offer competing grocery delivery services which are operated by the companies themselves rather than delivered through UPS or another third party. That idea could be expanded to all of the goods ordered through Amazon or Wal-Mart, which would leave UPS and FedEx in pretty big trouble.
     
    • Dislike Dislike x 1
    • Disagree Disagree x 1
    • List
  5. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    Amazon has already indicated that they will have 1 million of their most frequently ordered items available for delivery along with online grocery orders.
     
  6. worldwide

    worldwide Active Member

    I would not count Jeff Bezos out on anything. The worst thing any company can do is think there is no one else in the marketplace to take their place. The fewer Amazon packages in the UPS system, the fewer UPS employees are needed to sort, load, deliver and manage their account.
     
    • Agree Agree x 5
    • Like Like x 1
    • List
  7. TUT

    TUT Well-Known Member

    You guys all know it will take a lot more than what they have now. To do this right they are going to have to be near flawless and deliver all their millions of 23rd orders on the 24th, or else big waste of time and money. Right? It's silly really, we'll all get to see how big a deal this real is, in a year.

    I just think it is sort of funny how these writers think this is just easy to do.
     
  8. cachsux

    cachsux Wah

    I'm not saying they wont try. If you see just the sheer number of Amazon that we handle at CACH and the complete infrastructure to handle just their packages you'd realize what is invested just to get those items through 1 building. That's before they're distributed throughout the building and sent on their way to the delivery points and then out for delivery. We have had that system evolving for 100+ years. While Amazon is big for us we couldn't live on just Amazon. Just as Amazon couldn't build our system fast enough to support themselves before the weight of having to keep their customers happy crushes them. Plus, it may seem that Amazon is a big percentage in the dense urban areas, they'll find as we and the other shippers have that the farther out you go the less profitable the system is.
     
    • Like Like x 1
    • Agree Agree x 1
    • List
  9. Indecisi0n

    Indecisi0n Well-Known Member

    They should try using USPS.
     
    • Agree Agree x 1
    • Funny Funny x 1
    • List
  10. airintrace

    airintrace Active Member

    They need us actually a little bit more than we need them. Although Amazon is a big company they don't nearly have the transportation and infrastructure for delivery on their own as we do. It is FAR cheaper for them to outsource delivery to us than for them to construct a "fleet" to do the same thing. They are paying pennies on the dollar to ship with us than to do it themselves so to speak. If this was attainable and cost effective they would have did this quite a while ago.

    Lastly, Fed Ex would cut off volume at the drop of a hat just like they did during peak this year and they would blow out the post office. They can barely handle our sure post. That leaves the best game in town and incidentally the best in the business. Cmon Amazon… Can't we all just get along… hehehehe :grouphug:
     
  11. worldwide

    worldwide Active Member

    What I see Amazon doing next peak is putting more volume in with regional carriers. They already have a good density of warehouses accross the country that can get most items delivered via ground in 1-2 days. There are enought regional carriers out there that specialize in local ground delivery. Amazon will peel off volume that would normally go through UPS and Fedex and give it to the regional carriers. May be relatively small volume in the grand schem of things, but it will be volume that supplied work and jobs and UPS and Fedex.

    As Amazon builds out their grocery delivery service (delivered by Amazon branded trucks), they can easily peel off packages to be delivered at the same time. Amazon will alos install more of their lockers that either their vehicles or a regional can deliver to so that customers can pick up shipments on their own schedule.

    I simply see Amazon trying to move away from UPS and Fedex by building out their national warehouse model. There is less and less need to ship cross-country (where UPS and Fedex shine) and more need for local and 1-2 day ground moves (the strengths of the regional carriers).
     
    • Disagree Disagree x 3
    • Like Like x 1
    • List
  12. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    Not saying it will never happen but right now this is laughable. It would take years just to build the buildings to do this.
     
  13. SignificantOwner

    SignificantOwner A Package Center Manager

    1. It won't take 100 years because of technological advances. Amazon is very good with technology. Their system seems to ship orders from the closest possible DC. I'm sure if reliable regional shippers exist in some areas they can route packages to the regional shippers in only those areas, or possibly just route a percentage of the packages in those areas to allow controlled growth. As more regional shippers come online and/or expand it could be pose a real threat to UPS over time.
     
  14. alwaysoverallowed

    alwaysoverallowed Active Member

    Simply put if ups cut off amazon it would survive if amazon cut off ups it would self destruct.

    If amazon were to cut us off that just opens the door for their competitors(Walmart, target, etc.) to fill the void in our system.
     
  15. alwaysoverallowed

    alwaysoverallowed Active Member

    These regional shippers would be hiring the same low cost workers that ups gets during peak and we know how well they've been working out.
     
  16. cachsux

    cachsux Wah

    Infrastructure ruins on technology. It's not built by it.
     
  17. cachsux

    cachsux Wah

    If you think there was outcry over the largest shipping company being late in delivering 1/2 of 1% of its volume was bad wait till Bobs House of Package Delivery is late delivering 75% of Amazons stuff.
     
    • Like Like x 3
    • Agree Agree x 2
    • List
  18. Overpaid Union Thug

    Overpaid Union Thug Well-Known Member

    I'm anxious to see if that is true. That could create another route or two in some centers.
     
  19. Brownslave688

    Brownslave688 You want a toe? I can get you a toe.

    Route or two? My guess would
    Be about 10% more routes. If true. I find it highly unlikely we will be delivering 100% of amazons stuff.
     
  20. Indecisi0n

    Indecisi0n Well-Known Member

    Maybe amazon will start their own delivery fleet and I can apply to be a driver there.
     
    • Agree Agree x 2
    • Like Like x 1
    • List