It's okay! Fred Smith thinks its "Fantastical" that Amazon is trying to compete. He needs to take a break from the diluted purple Kool Aid and take a look around him.
Fred Smith needs a good dose of reality when it comes to future competition. Everyone seems to be in denial and wall street isn't buying the idea that Amazon can't compete.
Make no mistake Amazon has some obvious competitive advantages over Fedex and UPS.
•Amazon is building their logistics network with the latest technology which offers greater cost savings and efficiencies. Go hang out at the Fedex Hub and watch the train wreck as employees are still hand scanning boxes as they fall off the conveyor belts because they can't keep up. Meanwhile, Amazon has robots and GPS driven devices moving their packages. Take a jumpseat out of the sorting facility in Newark just to see how far behind some of the facilities are.
•Amazon has over 1/3 of the U.S. population as prime customers that will quickly become Amazon ship customers automatically at the click of a button.
•Amazon has the advantage of offering businesses one of the biggest marketplaces in the world and bringing customers straight to businesses and offer logistic and shipping services. Being just a shipping company will not be enough in the future. Fred Smith and others at UPS continue to boast about the fact that Fedex's business is mostly business to business. Amazon once ready can deliver greater value.
•Amazon is a tech company with forward-thinking individuals that can quickly overcome the idea that it takes a conventional logistic network like Fedex or UPS to compete. Technology and the right strategies can easily change that overnight.
Ask Kodak how things are looking these days...