An Amazon executive said the company at this point is just using its recent investments in logistics and transportation to handle internal capacity, including servicing sellers using its Fulfilled by Amazon (FBA) program where it handles third-party orders. See what else he said about the company’s logistics focus, as well as the status of its drone delivery program.
Amazon plans to build a $1.5 billion air hub at the Cincinnati/Northern Kentucky airport in Hebron, KY, part of its ever-growing logistics enterprise. Observers continue to believe Amazon’s endgame is to handle shipping and distribution not only for its own fast-growing ecommerce business but for other retailers as well.
FedEx told analysts on a third quarter call that Amazon was simply addressing capacity issues with its own assets a la other major retailers, so they weren’t worried about the business. For the quarter, FedEx’s net income fell 19% to $507 million, while Ground revenue was up 30% to $4.41 billion. However higher costs due in part to network expansion and peak season demand caused the segment’s operating income to drop from $559 million to $557 million.