Amazon will take all your ignorant route buyers

Discussion in 'FedEx Discussions' started by Exec32, Nov 22, 2018.

  1. Exec32

    Exec32 Active Member

    The gig is up. Fedex is losing the one competitive edge they had, and amazon will duplicate it.
    Contracting cannot meet the demands of your customers in this Industry any longer without excessive control and uniformity placed on the contractor pool.
    All of you contractors that believe you own something, well you can kiss that so called equity bye bye. The market of uninformed buyers will flock to Amazon, your price will now compete with another provider, and the competitor has better brand recognition.
    Amazon is simply applying more pressure on X and you will be the loser.
    People have pointed out the profit margin posted by Amazon in relation to potential profit. Let's be honest their margin is based on all leases trucks (New), and every expense otherwise hidden by X when they fooled you. The margin is point on according to the industry.
    The last obstacle is stealing the B to B customers and their profitable pick ups from X. That will be coming.
     
  2. Purplepackage

    Purplepackage Well-Known Member

    Gigs up guys, everyone should turn in there badge tomorrow.

    It was a nice run Fedex.......

    Give me a break lol
     
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  3. It will be fine

    It will be fine Well-Known Member

    Why would Amazon want B to B customers? That’s not the network they are building. They have no interest in being a common carrier. They just want to deliver their products cheaper.

    They have apparently limitless growth potential but much smaller margins still make their contracts less attractive in comparison. At least for me, I don’t have much interest in running hundreds of trucks daily.
     
  4. Purplepackage

    Purplepackage Well-Known Member

    This is slightly off topic for this thread but also amazons drivers are currently all over the news for hitting people/completely unsafe driving practices.

    Not sure business will really be trusting them to deliver things safely honestly
     
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  5. Exec32

    Exec32 Active Member

    B to B will come much later after they have acquired the right infrastructure and resources. The same way X achieved it. The unique thing is that Amazon can target the ones that give them the best return and leave the less profitable ones to others. They will do the same with dense areas leaving trampolines and basketball goals to you. Rural stops will remain with other carriers when it benefits Amazon.
    Amazon can easily set up accounts with large box retailers to serve that volume. X can deliver all the heavy batteries, hazardous, and less desirable accounts.
    Yes Amazon will establish a carrier division, just like groceries, video streaming and medication market divisions. They are in the perfect position to become a carrier.
    My point is though that the contracting model competitive advantage that X had is not exclusive any longer. And the uninformed entrepreneur is about to be taken for a ride from both X and Anmazon, shrinking the buyer market that some of these contractors thought exist. People will pay 10000 for the exact same thing you guys are offering at an inflated unsupported price.
     
  6. Exec32

    Exec32 Active Member

    Should of turn that badge in long ago. The point is you are losing your so called equity, and you will get screwed by X at the same time. An investor can pay 10000 for what you are offering
     
  7. Exec32

    Exec32 Active Member

    Fedex enjoys the exact same problem.
     
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  8. Indecisi0n

    Indecisi0n Well-Known Member

    Even UPS lost them.
     
  9. dmac1

    dmac1 Active Member

    They might not want the B to B customers, but you can bet that they will offer Amazon sellers pickups for drivers to take back to their distribution center. Not the huge shippers at first, but those with a few packages. And it will be once the delivery system gets fully sorted out.

    And even if Amazon makes no profit from the delivery service, they will still save money by not paying another company to profit. If Amazon can get delivery costs at the same level as FX, they can actually pay MORE. Even if they make 1/2 the profit per package that fedex makes, if they keep costs the same, drivers can make more. Point is, Amazon can make no profit, but increase customer service and decrease delivery times by using their own service, and I think that alone is enough incentive to use their own service. Faster delivery times means keeping people out of local stores and Amazon will profit from increased sales, even if they make no profit from delivering their own packages. In addition, having faster delivery service and a broader customer base because of faster delivery, more sellers will be encouraged to sell their products on Amazon. If Amazon can offer sellers lower shipping costs, it may be enough to cover the seller's costs on Amazon. Sellers can even reduce their advertising costs if they sell on Amazon, and reduce other overhead of running their own on-line sales department.
     
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    Last edited: Nov 22, 2018
  10. Exec32

    Exec32 Active Member

    Amazon can deliver at a loss or break even, you are correct. Now that is a competitive advantage that X cannot duplicate. Great point..
     
  11. bacha29

    bacha29 Well-Known Member

    While horror stories abound regarding AMZN delivery contractors they're really not much different that what we've seen and heard about XG contractor drivers. At the same time however AMZN does represent a new entrant into the cheap labor market. Keep in mind however AMZN is not operating nationwide or in every zip code therefore what the final product will look like will not be known for quite awhile.
    The most important question I believe is what can XG contractors do that XG cannot do itself? The answer is nothing outside of the only two reasons for which contractors exist in the first place......To be an anti union firewall and to provide margin protection in the face of future recessions and increased legacy costs as it pertains to Fedex's own retired and retiring employees.
     
  12. gman042

    gman042 Been around the block a few times

    Rumor has it that Walmart is poised to put a direct competition on the amazon corner of the the market. This coming from the local internet supervisor position newly created at my local Walmart. He happens to be my neighbor.

    He says that Walmart has the infrastructure in place(a Walmart in any strategic location they need) coupled with established trucking lanes.

    They will need to do very little to make any and almost every Walmart location a distribution center to deliver any local orders same day with their own fleet of delivery personnel.

    Watch out amazon
     
  13. bbsam

    bbsam Moderator Staff Member

    Amazon is the shiny new toy. A bit premature to crown them.

    I’m sure they’ll have to figure out how to pack boxes now since they will be paying the claims rather than being paid.

    There will no doubt be the push back from UPS on the pieces that Amazon would “rather not handle “.

    Probably see a fair number of contractors fail miserably, suffering poor service, horrible safety and hundreds of packages sitting for days undelivered as they try to figure out driver retention.

    X has been doing this for a very long time.

    Amazon hasn’t even peed their first diaper.
     
  14. bacha29

    bacha29 Well-Known Member

    Wait 5 years . Then we'll see how this thing plays out. Word of mouth is always either an employers best friend or his worst enemy and once contractor gets the reputation of being an employer who demands too much and pays too little he'll never keep up with the shippers ever increasing demands.
     
  15. zeev

    zeev Member

    Amazon’s main advantage they control the flow of freight and have confined themselves to dense urban areas. Also I was surprised Walmart waited so long to challenge them I think they waited to long.
     
  16. TheJackal

    TheJackal Well-Known Member

    Everyone is looking at it from Amazon's side. Let's flip it.
    Amazon touts profits of up to $300,000. That that number is for 40 routes running at full capacity for a full year. As an investor, is it worth it? That's a lot of work for $7,500 per truck per YEAR.
     
  17. Mr.Blonde

    Mr.Blonde Member

    Im always seeing the amazonians reversing into peoples driveways, And usually its not a back first exception.
     
  18. Future

    Future Victory Ride

    A few notches below when DHL ..decided 2 deliver ground
     
  19. Exec32

    Exec32 Active Member

    Claims? Really don't think that is an obstacle. Retention, that will be the contractors problem. Poor service, safety, undelivered packages? Tell me something X doesn't experience.
    Fred S laughed at Bezo 5 years ago when he mentioned solving his shipping cost by delivering there own packages. Fred ain't laughing anymore.
     
  20. Exec32

    Exec32 Active Member

    X bottom line will be significantly hurt when Walmart resorts to utilizing there own infrastructure and trucking resources to deliver there own packages. Two of my trucks would lose 30% of there volume if walmart did this. Just imagine what X loss would be.
    Walmart will do it, they have no choice. X will lose market share, ups not as much.
    Amazon is redefining the shopping experience, bringing the store to your door. The last mile element to amazon is only one piece of its model, for X it is the only piece to theirs. Walmart will deploy a carrier element to their model also, and will succeed.
    Both Amazon and Walmart will leave the scraps, unprofitable deliveries, to X and ups.
    If you say they cant make it happen, well I say you are ignoring all the factors that are forcing them to do it. In the short term, X will bargain for cost to win accounts, this will be short lived. Welcome to the new world of ecommerce and delivery, one and the same. X didn't see this coming 5 years ago, or they failed to respond.