UPS, facing massive volumes akin to the holiday season due to COVID-19’s impact on ecommerce, is imposing surcharges on larger-volume shippers and those sending bulkier items as of May 31 to offset its costs, impacting companies already reeling from the crisis. Experts agree they expect to see FedEx follow suit shortly.
Amazon Air is projected to have 200 cargo jets in its fleet by 2027 or 2028, bringing it close to parity with UPS if the latter doesn’t expand significantly, according to a study from DePaul University. The study said Amazon Air has grown to 42 planes since its launch in 2016, with plans to expand to 70 by 2021, putting it on par with DHL.
Now that it’s detached itself from Amazon, FedEx has entered into a multiyear agreement with Amazon’s cloud computing rival Microsoft, with the first offering using the latter’s real-time intelligence capabilities to provide FedEx shippers with greater visibility into transit time issues. Other solutions will be announced later this year.
While the USPS gets tossed around like a political football and threatens insolvency without more federal aid, the agency continues to report poor results as already lower mail rates have fallen through the floor due to coronavirus. Meantime, Trump ally, donor and fundraiser Louis DeJoy will be the new Postmaster General.
The USPS is asking Congress for $75B to avoid a liquidity crisis this fall, including $25 billion each for a cash infusion, for upgrades and modernization and for unrestricted borrowing authority, according to Government Executive. The USPS had already been in a bad position before the crisis, with even parcel growth falling off.
While ecommerce was initially thought to be a boon during the coronavirus crisis, with stores and malls in lockdown, execution is proving to be anything but as a growing chorus of drivers and facility associates complain about the danger of exposure. Workers at Amazon, Instacart and Whole Foods staged protest walkouts.
The impacts of the coronavirus spread are being felt everywhere across retail and ecommerce, with first stores and now ecommerce operations shut down to comply with government orders, and warehouse workers and drivers testing positive, forcing facilities to close so they can be scrubbed and restarted.
Amazon is severing delivery contracts in five states, affecting about 1,300 drivers, eliminating partners it says aren’t meeting delivery standards, according to Bloomberg and other reports. Two years ago, Amazon began a program to help entrepreneurs start up delivery businesses, creating less of a need for the existing contractors.
It is the synthesis of things Amazon does so well that makes it seemingly invulnerable. To me, trying to beat Amazon on just logistics without a symbiotic combination of brand, merchandising, marketing, technology and a financial war chest is just pure, unadulterated sophistry. Is there such a thing as an effective anti-Amazon strategy?
In an effort to attract more business from SMB ecommerce shippers, UPS and FedEx continue to expand their competitive offerings in flat-rate shipping, offering more options, customization and economy. Such programs aren’t as economically attractive to large enterprise shippers with their volume-based discounts.