tnkrdrvr

https://www.cnbc.com/2021/02/02/jeff...ver-in-q3.html

It will be interesting to see how Amazon’s approach to UPS and it’s in house operations change.

C2078

He will still be Executive Chairman.

tnkrdrvr

Generally, chairman is the position you take when you don’t want to call the shots, but still want to keep an eye on things. He won’t be making strategic calls, just second guessing the guy in the hot seat. My guess is he sees Amazon as being in a good place for him to disengage and focus on what he really is passionate about.

Ronaldo

One of my top goals would be getting pro-union politicians to force Amazon to unionize. Then we can have fair competition.

TransWorld

I am curious as to what he is really passionate about.

I agree, often a chairman works part time (relative to the President’s 70 hours per week).

tnkrdrvr

He has several other projects/companies. The one that he claims to be most passionate about is Blue Origin. Blue Origin’s goal is to move resource extraction and many heavy industries off the Earth’s surface and into space. His passion is backed up by the billion dollars he invests in it every year. So he might be serious about it.

I won’t be shocked if the new CEO decides to boost profits by focusing on profitable business lines (Amazon Web Services) and spins off unprofitable ones (like trying to build a logistics business). Bezos probably cares more about continuing improvements to Amazon’s bottom line and what that does to the share price than what industries it’s disrupting at this point.

Margaritaville

Disclaimer: I don't fly for a cargo carrier. Outside opinion here from several decades in this industry.

I don't see Amazon going forward with starting an in-house air cargo carrier to compete with UPS/FDX. What they have set up in CVG and other cargo hubs is the ultimate whipsaw scenario. They took the Delta RJ whipsaw playbook from the early 2000s, and applied it to heavy freight. There's at least 10 Amazon carriers now, and they are all set up to "compete" with each other. They all have short term (~5 year) contracts, and have to undercut the others when their contract expires, or they get cut. There is incredible pressure to cut costs, cut corners, and "win" these contracts or lose what they have invested. The pilots working there will always have an uphill battle at contract time negotiating in "cost boxes" (familiar term for those who spent time at the regionals), and have zero job security when their company loses the Amazon contract, shuts down or scales back, then they get recycled at the bottom of another carrier to start over (just like when regionals lost their contract and shut down). All of this is a wet dream for the bean counters at Amazon, who have an unlimited supply of cheap labor. They use the same model for their ground network. They would be crazy to take it in-house, then risk the unions which would surely follow, and a unified opposition, rather than their current divide and conquer system.

Some could say they lose control of quality in this model, but I argue that they don't care. Try filing a complaint against an Amazon delivery driver some time. Try calling Amazon customer service. All amazon cares about is moving boxes and hitting the delivery deadline in the cheapest way possible. They already have your money in Prime fees, and they know you aren't going to leave if 1 out of 100 deliveries has a problem. They just refund you and move on. That's pennies on the sidewalk to them. If you're not a customer, they don't care if a delivery driver mows down your mailbox backing out of the neighbors driveway. That driver is a sub, and it's not their problem. It's the ultimate case of having your cake and eating it too.

FDX has de-primed already, and UPS would be wise to do so ASAP. Amazon will always be a garbage, bottom dollar operation. Meanwhile, big box retailers like Walmart, Tar-ghey, etc will keep moving more online and have to compete with Amazon. They will need someone to deliver their boxes and will be willing to pay a premium to do it. FedEx has a niche in overnight (particularly business correspondence) deliveries to far flung destinations. Their contracted out ground freight network is crap. FedEx Express will always cater to the "here's your overnight envelope" model. UPS is the original US package hauler and is well positioned to keep that role, imo.

After this long winded, rambling post, my point is, I see Bezos stepping back as a good thing for UPS. It means Amazon is less interested in future investment or growth in the core business, but rather using the cash it generates to fund other ventures. He is basically putting Amazon Prime on autopilot, and moving on to bigger, more interesting projects. He probably sees that Amazon Prime is hitting the top of the growth curve. That leaves a lot of room for UPS to grow with amazon's competitors.