United Parcel Service Inc. and FedEx Corp. could be facing significant risk to their business after Wal-Mart Stores Inc.said it would offer discounts to some online orders if customers choose in-store pickup rather than home delivery. Analyst Ravi Shanker at Morgan Stanley said Wal-Mart’s move marks “a seminal event” in the evolution of last-mile parcel delivery for e-commerce.
Category: UPS News
What UPS and FedEx have to avoid is being a cheap peak demand shipper for Amazon’s business, particularly during the holidays. Amazon wants to be able to build its own logistics operation it can run full steam, offloading peak demand to companies like UPS and FedEx. But if they’re not compensated appropriately, they’ll lose money building capacity to meet peak need that’s then idle during slower seasons.
But here’s where the duopoly these two companies have in shipping may come in handy. They’ll compete with each other for Amazon’s business, but neither is desperate enough to make Amazon a loss leader as a customer.
High-profile drone delivery demonstrations continue, but frequent market use is years away, and hurdles must be overcome.
One of the clearest hurdles to the evolution of drone delivery in the U.S. is the slow and complex process of developing regulatory rules. The Federal Aviation Administration admitted after coming up with initial drone regulations last year that settling on delivery-specific rules will take at least a few years.
That reality probably puts the U.S. drone delivery market behind the market evolution in other countries, but many in the drone delivery sector are not critical of the long timetable.
“The FAA’s timetable is not a gating factor,” Jerome Ferguson, director of autonomous systems at UPS, told Retail Dive. “The FAA is really doing what it is supposed to do in doing everything is can to ensure a safe airspace.” UPS has a representative serving on the FAA’s drone regulation advisory committee, Ferguson said, so it at least has a seat at the table as rules get sorted out.
UPS driver Paul Pereira spotted flames leaping across a front porch of a house along his route in Haverhill while making his final delivery Monday.
Advertisement
“I just ran over, banged on the door, told the people in the house, ‘Your house (is) on fire!'” he said.
Brian Lavender, the homeowner, said his wife and daughter were inside the house at the time. They thought the smell was someone in the neighborhood using a grill.
Smart investors looking for income also look to fast-growing, dominant companies. They take advantage of companies with large cash flows that ensure consistent dividend payments every year.
As far as package delivery is concerned, no company is bigger than 109-year-old United Parcel Service. As the largest package delivery company in the world, it offers shareholders a 3.2% dividend yield. That is at least three times the average for the air delivery and freight service industry.