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“We’re growing our business” with the USPS and UPS, he said in an onstage interview with Walt Mossberg.
Bezos did, however, hint at another motivation: Getting better terms on delivery contracts with companies like UPS.
“Better prices on transportation would be acceptable to us,” he deadpanned.
Firm eyes regional cross-border traffic
United Parcel Service (UPS) is calling for removal of trade restrictions among Asean countries to boost economic growth in the region.
The global logistics provider is also urging Thai companies to take advantage of the easing of US customs policy.
Jim O’Gara, president for South Asia at UPS Asia-Pacific, said the region is one of the company’s growing markets with a high volume of business activities it could tap.
In one fell swoop, Memphis’ biggest company ballooned to nearly 400,000 employees worldwide and close to $58 billion in annual revenues.
The jewel of FedEx’s acquisition of TNT Express this week is a European road network linking 40 countries, but the heart of FedEx remains in Memphis.
No immediate impact was foreseen on FedEx’s Memphis area workforce of more than 30,000, but the company’s continued growth as a force in world commerce would have a ripple effect here. FedEx is the area’s largest private employer.
In March, Amazon signed a deal to lease Boeing 767 widebody freighter aircraft to handle some of its own domestic deliveries.
“Deals to lease 20 freighter aircraft from Air Transport Services Inc. and 20 more from Atlas Air Worldwide will give Amazon a fleet with an aggregate payload capacity roughly one-fifth that of FedEx and about one-fourth that of UPS,” Moody’s analysts wrote. “This would enable the company to move more than 20%, and possibly as much as 30%, of its volumes with its own fleet.”
Does this spell doom for UPS and FedEx? Not likely.
While the shippers will take a hit on the top line, profits are unlikely to suffer too much as Amazon is actually a very low margin customer because of the enormous discounts it gets.
David Abney started working for the United Parcel Service as a teenager in 1974. Now, as CEO of the $90 billion, Atlanta-based company, he knows that in order to compete in the package delivery market, UPS has to be a technology company.
“One thing we all have in common is that there’s probably someone somewhere out there thinking of ways that they can replace many of our businesses right now, and we either embrace change, embrace technology and the trends we face, or someone’s going to do it for us,” Abney told business executives at an event in Boston on Thursday, hosted by Boston College’s CEO Club.