Originally Posted by
whalesurfer
Well, maybe. Short term? Yes.. Long term? I guess you’d have to define “working together” and look into which side truly benefits from this relationship.
Personally I believe Fred was right in cutting ties with Amazon.
Same business, but FedEx and UPS have long had different strategic but successful strategies.
If look back at UPS history, they fought the USPS everywhere in the government. FedEx took the omnipotent USPS contract in 2013 that they already had and have it till Oct 2024. It provides FedEx 1.5 billion a year. UPS didn't really want it and lost the opportunity in 2013. UPS went after TNT, but European competition committee gutted the deal and UPS wisely left.
FedEx has had a tough time with TNT.
Much of the business is on the ground. UPS has always been determined to minimize exposure in last mile of delivery. Amazon is investing huge in ground delivery. UPS now allows private vehicle delivery. UPS is heavily unionized, FedEx and Amazon zero. UPS sees an in, they just rolled out temporary workers using own vehicles.
https://www.detroitnews.com/story/bu...ries/40704203/
"United Parcel Service Inc. is expanding its hires of drivers using their own vehicles to help with the avalanche of holiday deliveries spawned by online shopping, and that’s rattling veteran drivers of the iconic brown van from New York to Kentucky."
Unlike competitors FedEx Corp. and Amazon.com Inc., UPS has a unionized workforce, and local Teamsters leaders aren’t happy with a trend they see as reducing opportunities for their members and hurting the UPS brand.
“They’re lowering their own standards so much,” said Vincent Perrone, president of Local 804 in New York City and Long Island, where the personal-vehicle drivers will be used for the first time this year. The local has filed a labor grievance with UPS to challenge the jobs.
UPS’s expanding use of temporary employees who use their own cars to make deliveries is stoking tension between the courier and unionized workers after a contentious battle over a new labor contract last year. One sore point: Permanent drivers worry the expanded seasonal hires will mean they’ll earn less overtime during the busiest season of the year."
Am certain UPS is going for permanent private vehicles in certain areas. Later, they will team with non union Amazon workers to deliver stuff just like UPS uses USPS to deliver UPS stuff. Staying close moving high yield Amazon volume gives many strategic cost benefits to UPS. Fred chose another path, but common for each to choose own path. Nothing new strategically in my view. Just a change in opportunity for the big companies. I think UPS has got some great opportunity staying in the mix with Amazon. Both can work out cost advantages outside of simply air side. (and UPS will still move it profitably)
Lots of moving parts.