Amazon Effect?
 

Thoughts on this: https://www.cnn.com/2018/12/04/inves...ort/index.html

I've heard that the air portion accounts for roughly 10% of Brown's total revenue as they offer more than delivery services.

However, could this hurt future hiring, etc?

I worry about it and I won't even be here by then! Wall Street is rife with old dinosaurs that failed to adapt to new competitors that were using superior technology and innovation. Think xerox and Kodak.

It's not only the competition in shipping, what happens when Amazon decides to share some of its warehousing technology or gets into logistics using it's software skills to compete in field of synchronizing commerce?

Long term, I'd worry.

All of these "OH NOES! AMAZON STEALING SHIPPING MARKET SHARE FROM UPS AND FEDEX!" articles seem to be looking at the issue from a fundamentally flawed, narrow perspective.

There is a much larger, and ever-increasing sized, pie for e-commerce and the shipping logistics associated with it than compared to passenger travel.

Every retailer in the world would like to have a piece of the online retail pie, and the future is going to be those companies competing with Amazon for market share.

Who are those companies going to use for shipping?

The overnight shipping market is already quite narrow, with lots of opportunity for competition. The idea that a newbie is going to roll in and knock out the two that invented the practice is folly.

How DARE you interject even an ounce of reality into this hyperbolic discussion.

The Morgan Stanley author of that investor note said the effect would be multiplied once they were flying all 40 airplanes...uh, they are now, with exactly zero additional airframes publicly announced. Additionally, as Prime Air has grown, the volume has gone up so much that there is PLENTY to go around.

It would be naive to utterly dismiss the potential threat Amazon faces to the duoply...but it it would be just as naive to suggest Amazon is going to bury the duoply in the short/medium or even long term.

I’d be more worried about the amazon effect for FedEx/UPS if they could actually deliver packages on time consistently. The times I’ve tried to overnight ship something with them, it’s arrived at the same time as a regular 2 day shipping is supposed to. Often times Amazon 2 day shipping takes 3-4 days where I live. Zero recourse when products arrive late other than having to print out a Label and drive to UPS to ship the product back.

The only nice thing about amazon shipping is that it’s free with a prime membership. I find their lack of consistency annoying at the free price point. I’d be irate about it if I actually needed them to deliver on time and I paid for it. If anything Amazon late delivery returns will continue to provide a revenue stream to UPS.

While I agree that prime says that shipping is free, that just means that shipping is rolled into the price. Sometimes you can find the exact same (low priced) item either as a prime item with "free" shipping, or as an "add on" item at a significantly lower price.

Joe

Amazon always delivers my same day and overnight shipments to my neighbors (couple of crack heads that sell my items and say “nope, we didn’t get anything”).

2 day shipping, the items are late but at least show at my doorstep.

Nope. It’s more like 40%. The air side is extremely profitable. Much of the next day air stuff gets trucked.

UPS can take one of those brown bread trucks (package cars in our world) and change the engine, transmission, axles and 4 new tires between the time the driver parks it and comes back to work the next morning.

Try that with a Mercedes Sprinter..... [emoji41]

https://uploads.tapatalk-cdn.com/201...efe9c85212.gif


Sent from my iPhone using Tapatalk

G550,

Well done, sir. Well done.