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Old 12-13-2019, 01:01 AM   #1  
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Default Watch out, UPS.. Amazon delivering half...

Nothing new per se but Amazon Prime’s rate of growth is stunning..

____
Watch out, UPS. Morgan Stanley estimates Amazon is already delivering half of its packages

PUBLISHED THU, DEC 12 201911:24 AM
Michael Sheetz

Amazon Logistics is the e-commerce giant’s in-house logistics operation.
“Our AlphaWise analysis shows that Amazon Logistics already delivers ~50% of Amazon US volumes, focused on urban areas,” Morgan Stanley said.
The firm estimates Amazon Logistics will reach a volume of 6.5 billion packages per year by 2022, far exceeding its estimate for UPS at 5 billion packages per year and FedEx at 3.4 billion packages per year.

Amazon is already delivering about half of its own packages in the U.S., according to a Morgan Stanley estimate on Thursday, and will soon pass both United Parcel Service and FedEx in total volume.

Amazon Logistics is the e-commerce giant’s in-house logistics operation. Morgan Stanley said Amazon Logistics “more than doubled its share” of U.S. package volumes from about 20% a year ago and is now shipping at a rate of 2.5 billion per year. For comparison, Morgan Stanley estimates UPS and FedEx have U.S. shipping volumes of 4.7 billion and 3 billion packages per year, respectively.”

“We see more of this going forward as our new bottom-up US package model assumes Amazon Logistics US packages grow at a 68% [compound annual growth rate from 2018 to 2022],” Morgan Stanley said.

That would put Amazon Logistics at 6.5 billion packages per year by 2022, according to the firm, far exceeding its estimate for UPS at 5 billion packages per year and FedEx at 3.4 billion packages per year.

“To us, Amazon Logistics is already-large scale and with a fleet ~1/5 the size of competitors, it speaks to its ability to use density and technology to drive efficiency,” Morgan Stanley said.

20% upside?

The firm says Amazon Logistics is more focused than its competitors on densely populated areas. According to Morgan Stanley’s estimate, about 61% of Amazon Logistics’ package volumes are from suburban areas, 28% are from urban areas, and just 11% are from rural areas. That makes Amazon Logistics’ rural focus about half of its competitors, as the rest of the industry typically derives 20% of package volume from rural areas, the firm said.

Morgan Stanley has an overweight rating on Amazon shares, with a $2,100 price target that is nearly 20% above the stock’s current level.

The firm also lowered its price target on both UPS shares to $78 from $85 — about 33% below its current price — and FedEx shares to $111 from $120 — which would be a drop of about 32% from current levels. Morgan Stanley has an underweight rating on UPS and an equal-weight rating on FedEx.

— CNBC’s Michael Bloom contributed to this report.


https://www.cnbc.com/2019/12/12/anal...ups-fedex.html
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Old 12-13-2019, 03:29 AM   #2  
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The first half is the ez half...will be interesting to watch.
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Old 12-13-2019, 03:54 AM   #3  
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Default Watch out, UPS.. Amazon delivering half...

"The sky is falling, the sky is falling!"

For the last 15 years that I've been paying attention, Morgan Stanley's notes have been more wrong than right, seemingly publicized to cause near-term stock price movement more than anything else. Sensationally written clickbait headlines serve the same purpose.

Notice how the story didn't mention how Amazon volume at UPS has spiked in 2019, or how Amazon volume has sharply declined for USPS.

Last edited by BoilerUP; 12-13-2019 at 04:06 AM.
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Old 12-13-2019, 06:15 AM   #4  
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"The sky is falling, the sky is falling!"
Never said that. ...and I don’t believe the article implies it either.

AMZN has been great for my stock portfolio so far. However I still think the rate of Amazon PRIME’s growth has been phenomenal.

After all, it wasn’t that long ago people on this very forum didn’t believe Amazon would ever get into the shipping side of business. Well they did. ..with a vengeance.

So this is more about FDX versus UPS approach to Amazon. I still think FDX has more of a long term view whereas UPS continuous doing business with Amazon knowing that in the long term it’ll be a parasitical or harmful (to UPS) relationship. Once again, time will tell.
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Old 12-13-2019, 06:34 AM   #5  
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Never said that.
No, you didn't.

The comment wasn't toward you, but rather the Wall Street types that continue to further their prognostications, made more from emotion than verifiable fact, in public.

Financial websites were posting articles by analysts just two years ago how FDX was kicking our arse and Amazon was going to put us out of business...but where are we today? Showing growth and financial performance WAY better than anybody thought we would.

Yes, Amazon has quickly grown their logistics business carrying a substantial amount of their own volume by focusing on high population density areas...but even as Prime Air has formed and navy blue Sprinter vans have flooded suburbia, our Amazon volume has only increased. Furthermore, our B2C volume has increased no less than 6% each of the last two years, more than 3x what Morgan Stanley projects we'll see in 2020 and 2021.

Yet, the headline reads "Watch out, UPS"...
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Old 12-13-2019, 06:58 AM   #6  
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No, you didn't.

The comment wasn't toward you, but rather the Wall Street types that continue to further their prognostications, made more from emotion than verifiable fact, in public.
....
Yet, the headline reads "Watch out, UPS"...
True but I think many analysts believe our relationship with Prime will hurt us in the long term. That we’re helping our future competition and that our short-term gains won’t offset the long term damages to our business. In 5-10 years we’ll know.
So in the meantime I’m investing in both.
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Old 12-13-2019, 07:47 AM   #7  
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True but I think many analysts believe our relationship with Prime will hurt us in the long term. That we’re helping our future competition and that our short-term gains won’t offset the long term damages to our business. In 5-10 years we’ll know.
So in the meantime I’m investing in both.
My take on this is that e-commerce has grown to the point that the US domestic market can support three healthy logistics companies. UPS, FEDEX, and Amazon all have different models for providing similar B2C services. If e-commerce continues to grow, we may see even more entrants to the market. This is just the slow maturation of a business area that UPS has evolved with for over a hundred years.
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Old 12-14-2019, 07:09 AM   #8  
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Quote:
Originally Posted by whalesurfer View Post
True but I think many analysts believe our relationship with Prime will hurt us in the long term. That we’re helping our future competition and that our short-term gains won’t offset the long term damages to our business. In 5-10 years we’ll know.
So in the meantime I’m investing in both.
I believe this is one of the reasons why FDX cut ties with them. We are concentrating more on high yield DG and medical related items that flying toothpaste and toilet paper around. Hopefully it works out long-term.
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Old 12-14-2019, 09:46 AM   #9  
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....medical related items that flying toothpaste and toilet paper around. Hopefully it works out long-term.
UPS health care business has grown exponentially over the last couple of years, in fact, that is a major area of focus, very profitable, we have opened multiple distribution facilities around the country to better serve time sensitive merchandise /items.

Again, don’t understand why people need to put down a competitor when posting a reply, “flying toothpaste and toilet paper around”, really?

No one knows how these decisions will turn out, no one has a magic wand. Both Fedex and UPS are adapting, transforming, both will be fine. Neither is sitting idle doing nothing. There is plenty of volume to go around. These analysts are a bunch of overpaid, over privileged baffoons who love to spread doom and gloom, for Fedex, UPS, whoever.
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Old 12-14-2019, 01:25 PM   #10  
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I doubt that we're flying much toothpaste or toilet paper.
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