Amazon expands service into the logistics sector

By Sean Galea-Pace
The e-commerce giant, Amazon, has expanded its services to begin conducting business in the logistics industry, according to CNBC. As a result of Amazo...

The e-commerce giant, Amazon, has expanded its services to begin conducting business in the logistics industry, according to CNBC.

As a result of Amazon’s progress in the shipping sector, logistics firms FedEx and UPS has begun to make changes to their strategies moving forward.

FedEx has made an adaption to its relationship with Amazon, which has seen the delivery company put an end to the ground delivery contract with Amazon. With the decision made in early August, a FedEx spokesperson said at the time: “This change is consistent with our strategy to focus on the broader e-commerce market, which the recent announcements related to our FedEx Ground network have us positioned extraordinarily well to do.”

“We are constantly innovating to improve the carrier experience and sometimes that means re-evaluating our carrier relationships,” an Amazon spokesperson added. “FedEx has been a great partner over the years and we appreciate all their work delivering packages to our customers.”

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While, UPS is continuing to look at how new technologies such as drones and autonomous vehicles are modernising its delivery services.

Amazon has outlined its intentions to develop its delivery fleet as it begins the process of renting planes and offering $10,000 to its employees to leave the firm and start their own local delivery business ventures. Ken Hoexter, a research analyst at Bank of America Merrill Lynch, commented: “I think Amazon has stated that they’re now a competitor to the transport industry. FedEx has clearly viewed them as an increasing competitor following their recent moves.”

In a June 2019 statement, FedEx revealed that Amazon made up around 1.3% of its total revenues in 2018 which equated to around $900mn.

The latest news adds to Amazon’s busy summer in the logistics industry as it was announced in June that the firm is set to add 15 Boeing 737 air freighters to its ever-increasing air cargo division and plans to have more than 70 in its fleet by 2021.

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