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Amazon Changes its Annual Filing

Amazon recently stated that they are now a transportation and logistics services provider according to their latest annual filing.

So why do we continue to carry their packages?

What would happen to Amazon if we stopped delivering their packages?

I know I have heard that they are a small percentage of our operation. Are we afraid to poke them in the eye?

“Hold you friends close, but your enemies closer.”
-Michael Corleone

Amazon Changes its Annual Filing

Quote:

Originally Posted by jetstar1 (Post 2763895)

Good question, I’m also trying to learn what the long term strategy & response to Amazon will be.

I’m seeing amazon delivery trucks all over the place in my neighborhood. They are on a fast track construction of distribution centers and offices all over the world.

When we think or read about E-commerce growth we all know 80-90% of that is Amazon.

We carry their packages because they pay us.
Pretty sure we’d be happy to be paid to carry UPS cans if we had the space

Amazon is at most 3% of our $$.

https://www.bizjournals.com/memphis/...fedex-and.html

Not sure how true this story is,
but circa 99 the Post Office approached UPS with a request to bid for Postal Freight and UPS reportedly said you’re our competitor, why would we help you...while FedEx said Sure, Love to help.

What % of Amazon stuff originates as Postal Svc vs Amazon warehouse? I know most of their smaller stuff ends up in my mailbox with a usps label, but I’m fairly certain it made it on one of our planes at some point. FedEx may not be able to do much about those items.

Quote:

USPS ships about 40 percent of Amazon’s packages. Amazon bulk-delivers packages to a USPS distribution center, and the Postal Service brings it to your door. USPS negotiates the discounted rate for that service with Amazon, as it does all other bulk shippers.

Quote:

In 2017, parcels brought in $19.5 billion, or 28 percent of USPS’ annual revenue. At $2.1 billion, packages contributed the largest revenue increase.

Deals with private shippers like Amazon accounted for $7 billion of the $19.5 billion in revenue. While we know that Amazon is the biggest e-commerce player, we don’t know exactly how much of the $7 billion comes from Amazon, because the details of the postal service’s deals with private shippers are considered proprietary and not made public.

I'd assume Amazon is a fairly large chunk of that 7 $Billion

https://www.politifact.com/truth-o-m...osing-fortune/

Please correct if I am way off base on info below:

So UPS had the USPS contract prior to FedEx?

This contract above just got extended with FedEx?

Amazon leader and FedEx leader are not buds?

Although FedEx has not declared Amazon as a competitor per say, Amazon and UPS have come forward recently to announce they are “monitoring” each other vs Amazon just being another customer.

Amazon made a deal with USPS to move a portion of their e-commerce goods several years ago.

FedEx has the latest contract with USPS; therefore, some Amazon goods are shipped via FedEx? (mere 3% I read earlier in this thread)
Probably unable to stop flow of Amazon goods moved by FedEx due to USPS contract maybe?

Amazon bought 4000 vehicles (small vans) a few years ago. I keep seeing a lot of these gray vans running around my area and we are not that populated. (Maybe it’s just my wife/me ordering stuff)

Amazon has now has ordered something like 20,000 Mercedes type delivery vehicles I read in a logistics report, probably easy to google.

Amazon breaking ground at CVG (kind of a large ramp/2021ish completion maybe) and plans for other areas perhaps. Plus, they have ordered/contracted for 10 more aircraft on top of the numbers of aircraft fulfilled on their initial venture at CVG.

Amazon is expanding in the areas mentioned above to encapsulate their ever increasing e-commerce and perhaps other markets besides their own. Just me pondering this chess board...

Once again, please correct info above and this will help to paint a better/decent picture of Amazon Air/Ground strategy.

Thx for any help up front!!!

For Fedex AND UPS alike, the business has to evolve, constantly change and transform, what worked last decade/a year ago may not work today.

I sincerely hope both Fedex and UPS are doing enough behind the scenes to evolve the business, account for the Amazon (and others) threat.

One example that comes to mind is the comments made by UPS management during earnings call (simply pointing out an example, this is not Fedex vs UPS because I hope both of our companies thrive for decades to come). They stated 2019 will be a big year for improving/increasing margins due to I believe 80% of the sorting being done automated. Unfortunately I take this to mean machines will replace manual labor which reduces costs. One example where automation helps the bottom line. So when Amazon becomes a more direct competitor, maybe UPS (and Fedex) can be a bit more aggresive on pricing to better compete without compromising margins.

Competition is healthy, and a business needs to evolve or it will perish. I hope for all our sakes Fedex and UPS are doing/will do enough to evolve/transform. One thing is completely clear. Standing still, relying on what you have been doing in the past is NOT AN OPTION!!

Maybe I need to rephrase my question: I’ve often heard no single customer accounts for more than 3% of our revenue. I assume that’s a contract with amazon, roughly $2B.

My question is, what % of our USPS contract is Amazon? Are they 50% of that $1.5B? Looks like our total exposure might be more like 5%, a certain amount of that insulated by 5 years remaining on the USPS contract.

Guess I answered it myself...