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Does Amazon have its sights set on FedEx and UPS?

It’s pretty clear that Amazon (AMZN), and in particular its Amazon Prime free shipping program, has been a boon to the likes of UPS and FedEx. With an estimated 7.2 billion items being sold this year, those packages have to get from the warehouse to the customer somehow.

To date, Amazon appears to have been content to let its partners deliver the packages the final mile, if not the final several hundred miles. But times seem to be changing as the e-tailer looks to shrink the delivery more and more. The company now leasing planes and building out distribution hubs, and it looks like the company could be setting its sights directly at UPS and FedEx core capabilities by opening up its logistics hubs and much the way it opened its cloud computing platform with its Amazon Web Services, offering those services to other businesses.

Others believe that Amazon will make a business out of its delivery network, as it did with Amazon Web Services, thereby challenging the world’s leading shipping companies. “I fully expect Amazon to build out a logistics supply chain that others can use,” says John Rossman, a former Amazon executive who’s now a managing director at the restructuring firm Alvarez & Marsal. “Over the next five years? I doubt it. Over 10 or 15 years? Oh yeah.”

Source: Will Amazon Kill FedEx?

About the Author

Chris Broussard
I'm the Co-Founder and President of Tematica Research and editor of Thematic Signals, which aims to uncover confirming data points and items to watch for our list of investing themes. Whether its a news item, video clip, or company commentary, we've included this full list of items literally "ripped from the headlines." I have been involved in financial services marketing and publishing for over 20 years – having held senior level positions with financial publishers, financial services corporations and providing marketing support and consulting services to financial institutions and independent financial advisors. My background in digital marketing, financial services and consumer research provides me with a unique perspective on how to uncover the underlying proof points that are driving the themes our Chief Investment Officer Chris Versace utilizes in our various Tematica publications.

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