Amazon becomes its own biggest carrier after cutting ties with FedEx
Amazon has become its own biggest carrier after cutting ties with FedEx and reducing its reliance on UPS, which delivers about half the company's packages globally.
Amazon ships more than 2.5 billion packages a year in the U.S., while FedEx and UPS ship 3 billion and 4.7 billion, respectively, according to recent estimates from Morgan Stanley. Amazon's deliveries will reach 6.5 billion by 2022 at $10 a package, analysts said, posing the threat of a $65 billion loss in revenue for UPS, FedEx and the U.S. Postal Service (USPS) from Amazon's business.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 186.24 | +1.51 | +0.82% |
"Amazon’s transportation network is built on a foundation of 20 years of operations and logistics experience, an unwavering commitment to safety, technological innovation, and talented teams who are obsessed with delivering for our customers," Amazon Worldwide Operations Senior Vice President Dave Clark said in a statement Thursday .
"Thanks to these great teams we’ve delivered 3.3 billion customer packages worldwide this year, and are on track to deliver 3.5 billion packages by the end of the year. These are big milestones on behalf of our customers," Clark added.
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Amazon said in October that it was "ramping up" its Prime delivery service to get packages to customers in just one day ahead of the holiday season. To reach its goals, the tech giant bought more jets, vans and storage warehouses at a price tag of about $1.5 billion.
Amazon has 150 U.S. delivery stations that employ more than 90,000 company associates who earn at least $15 per hour with benefits. Amazon's Delivery Service Partner Program also gives entrepreneurs the opportunity to start and develop their own local delivery services, according to a Thursday press release from the company.
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For an initial investment of $10,000, anyone can deliver packages from Amazon warehouses to their destinations using Amazon vans and logos while simultaneously operating their own delivery businesses. The program allows Amazon a better opportunity to avoid problems with last-minute delivery.
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But as Amazon grows, regulators have kept a watchful eye on whether it is developing monopolistic tendencies. The Justice Department announced an antitrust investigation into the company in July to review "whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers," according to a press release.
The European Commission also announced an antitrust investigation into Amazon in July.
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