Originally Posted by
JonnyKnoxville
In the ever growing air freight market, there is room for Amazon to join UPS and FedEx without ruining the party. For those following closely, the scope and scale of what Amazon is trying to accomplish is nothing short of amazing. The only thing that threatens stopping this freight train will be the U.S. Government and the Sherman Anti-trust Act.
As an employee of FedEx Express, I would be a liar if I said Amazon's decision to start moving their own goods doesn't concern me. However, allow me to be the naysayer. I don't believe anything Amazon is doing is anything "short of amazing." How so?
Walmart is going head to head with Amazon. Walmart has been way up and beat sales forecast and the market's expectations where Amazon is sort of at a peak and has slowed. I am not an Amazon subscriber but I increasingly and anecdotally hear people say "Amazon isn't the cheapest anymore" ... there's also a lot of people saying they need to get Prime deliveries on time before they start committing to one day shipping. In short, Walmart is rapidly becoming more like Amazon, and Amazon is rapidly becoming more like Walmart. So why should FedEx be worried? I don't know.
E-commerce makes up only 12% of the total logistics in the world. Amazon, in the USA, makes up half of that, but not worldwide. FedEx's largest customer makes up no more than 3% of revenue. Amazon, per Fred Smith's admission is only 1.3% of FedEx's revenue. Yet, FedEx is growing because the increase in not only from its core businesses but also in the growing e-commerce sector (not from Amazon).
Amazon leasing some planes doesn't seem to be a threat to Fedex when you start to understand what FedEx is hauling and what Amazon is hauling. However, should Amazon start wanting to deliver other companies and other peoples' goods/freight/cargo (not Amazon boxes), that could be an issue. But why would they want to do that? To subsidize their own costs? Perhaps. They're already having trouble moving their own goods. Why take on the burden to move others' stuff at risk or slowing or disrupting your core business?
Additionally, Amazon's leasing of airplanes from multiple companies who have extreme labor and contract issues doesn't exactly describe an efficient and on-time operation. If they can't fill the cockpits now, how can they expect to fill 60 more planes?