Amazon building an air hub..do you think they can make ups go down?

Couple of things to keep in mind... Amazon packages have very slim profit margins.. almost nothing really ... while it does help our stop density in rural and residential areas - they are almost adding nothing to the profit margins - 30% of the volume - 5 to 6% of the profit ( I never want to work for a company that does not make a profit ) - in my opinion - where they can and most likely will hurt us is when they get their own network up and running with the current "fed-ex ground" model where they have very limited exposure to many of the cost drivers we have ( insurance - benefits - social security tax match - workers comp liabilities etc) they will start to pull 3rd party customers away from UPS and use them to supplement their own shipping cost - meaning build package / stop density within their own network - empty space does not pay well. Once we start to lose that market share to Amazon - if will start to show itself in a big way - and I am afraid in a rapid way... the major part of our business structure is based on package consolidation... we currently have better tech - but they have deep pockets and a will to prevail...
 

Maple Grove MN Driver

Cocaine Mang!
Couple of things to keep in mind... Amazon packages have very slim profit margins.. almost nothing really ... while it does help our stop density in rural and residential areas - they are almost adding nothing to the profit margins - 30% of the volume - 5 to 6% of the profit ( I never want to work for a company that does not make a profit ) - in my opinion - where they can and most likely will hurt us is when they get their own network up and running with the current "fed-ex ground" model where they have very limited exposure to many of the cost drivers we have ( insurance - benefits - social security tax match - workers comp liabilities etc) they will start to pull 3rd party customers away from UPS and use them to supplement their own shipping cost - meaning build package / stop density within their own network - empty space does not pay well. Once we start to lose that market share to Amazon - if will start to show itself in a big way - and I am afraid in a rapid way... the major part of our business structure is based on package consolidation... we currently have better tech - but they have deep pockets and a will to prevail...
So UPS will be out of business in 3 to 5 years is what you are saying?
 
So UPS will be out of business in 3 to 5 years is what you are saying?
No... I dont think UPS will be out of business in 3 to 5 years - we do need to be mindful of the demands of the marketplace - such as Saturday delivery - access points etc.. coupled with flexibilities that are needed in order to meet those demands - both now and in the future... with that said - I started in 1982 - a few years before that - there was a fairly large delivery company that was shuttered ( Railway Express)- they didnt respond quick enough ....and soon after - mid 80's - another one was started by Roadway Package ( RPS) which grew and was then purchased by Fed-Ex and is now FedEx ground... change happens - it is what we do with it that matters / determines our future...
 

Rick Ross

I'm into distribution!!
they will start to pull 3rd party customers away from UPS and use them to supplement their own shipping cost - meaning build package / stop density within their own network - empty space does not pay well.

Amazon is cherry picking the packages they want to deliver right now and UPS, USPS and FedEx are being dumb enough to let them. Either that or they all know the pie is so large no one compant will ever truly be dominant (which is what I think is happening). Volume and pricing both go up 5% a year for everyone, coincidence?

Right now we pick up 50+ trailers a week from their 3rd party warehouses shipping mattresses and all the other junk they won't give to their own drivers. When they start delivering that junk I'll believe they are actually competition.
 

Overpaid Union Thug

I ❤️ (_!_) & ( , )( , )
Couple of things to keep in mind... Amazon packages have very slim profit margins.. almost nothing really ... while it does help our stop density in rural and residential areas - they are almost adding nothing to the profit margins - 30% of the volume - 5 to 6% of the profit ( I never want to work for a company that does not make a profit ) - in my opinion - where they can and most likely will hurt us is when they get their own network up and running with the current "fed-ex ground" model where they have very limited exposure to many of the cost drivers we have ( insurance - benefits - social security tax match - workers comp liabilities etc) they will start to pull 3rd party customers away from UPS and use them to supplement their own shipping cost - meaning build package / stop density within their own network - empty space does not pay well. Once we start to lose that market share to Amazon - if will start to show itself in a big way - and I am afraid in a rapid way... the major part of our business structure is based on package consolidation... we currently have better tech - but they have deep pockets and a will to prevail...
If Amazon keeps taking business away from retailers we will be losing more than Amazon deliveries. And FedEx is undercutting us on whats left at every opportunity so our routes are going to be expanding quite a bit as Lots of routes are cut.

On a positive note (I'm anti-USPS)....the local USPS carriers have approached a bunch of us asking about Amazon. Apparently they've lost allot more volume than we have. One on my route barely has any Amazon now. Says it's like that every day since Amazon Flex drivers started working in the Area. And also that the Amazon trucks that were dropping thousands of packages off at the stations no longer come. I have to admit that I'm happy that they seem to be losing so much. A government entity shouldn't be competing with the private sector any way. If we are going to be losing out to competitors I'd rather they be legit.
 
If Amazon keeps taking business away from retailers we will be losing more than Amazon deliveries. And FedEx is undercutting us on whats left at every opportunity so our routes are going to be expanding quite a bit as Lots of routes are cut.

On a positive note (I'm anti-USPS)....the local USPS carriers have approached a bunch of us asking about Amazon. Apparently they've lost allot more volume than we have. One on my route barely has any Amazon now. Says it's like that every day since Amazon Flex drivers started working in the Area. And also that the Amazon trucks that were dropping thousands of packages off at the stations no longer come. I have to admit that I'm happy that they seem to be losing so much. A government entity shouldn't be competing with the private sector any way. If we are going to be losing out to competitors I'd rather they be legit.
Overpaid... in my area of responsibility - we are not seeing that - in fact - Amazon just "turned on" about 7 or 8 Post Offices - so they are getting bombed with Amazon - these rural route PO carriers are upset due to the fact their routes are studied for a two week period - which apparently sets their pay ( something to do with the route is allotted "xx" amount of time to complete and their pay is based on that two week study - so now with the additional work - they are having to double and triple trip back to the PO to load up more packages ) these routes were studied before Amazon started bypassing UPS in late October and taking straight to the PO for final mile... I can walk down the belt in the morning and point out which package cars work in the area's this is happening - they might have a few smiley boxes - but nothing like they were several months ago... the package cars that serve the areas that Amazon has not turned on - about 35 to 40% of the stops are Amazon.... to your point - if they continue to grow as they have over the past several years - it will only be a matter of time before they start their own delivery into these "super rural" areas...
 

Overpaid Union Thug

I ❤️ (_!_) & ( , )( , )
Overpaid... in my area of responsibility - we are not seeing that - in fact - Amazon just "turned on" about 7 or 8 Post Offices - so they are getting bombed with Amazon - these rural route PO carriers are upset due to the fact their routes are studied for a two week period - which apparently sets their pay ( something to do with the route is allotted "xx" amount of time to complete and their pay is based on that two week study - so now with the additional work - they are having to double and triple trip back to the PO to load up more packages ) these routes were studied before Amazon started bypassing UPS in late October and taking straight to the PO for final mile... I can walk down the belt in the morning and point out which package cars work in the area's this is happening - they might have a few smiley boxes - but nothing like they were several months ago... the package cars that serve the areas that Amazon has not turned on - about 35 to 40% of the stops are Amazon.... to your point - if they continue to grow as they have over the past several years - it will only be a matter of time before they start their own delivery into these "super rural" areas...
Our rural routes and USPS rural carriers aren't affected yet. But the routes in or near town def are.
 

Rick Ross

I'm into distribution!!
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