Amazon’s moves into logistics and fulfillment over the past few years have been well-documented, with FedEx and UPS downplaying the threat and Amazon saying it just wants to address its capacity shortfalls. Until now, that is, when Amazon added “transportation and logistics services” to the long list of competitive sectors in its 2018 10k filing.
Spending on ecommerce logistics in the U.S. reached $117.2 billion in 2017, representing 6.9% of all domestic logistics costs, up from 5.2% in 2016, according to a new report from Armstrong & Associates, as online buying continues to experience 14% annual growth.
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.
Surprising no one, Amazon ended months of speculation by announcing it was leasing 20 Boeing 767 cargo jets from Air Transport Services Group Inc., while at the same time taking a 20% stake in the Wilmington, OH-based company. See what others are saying about this move.
Amazon has taken another step in its march toward world dominance, as it plans to create a global shipping and logistics operation. See what the plans are for the ecommerce marketplace.
In its continuing march toward setting up its own logistics and shipping operations, Amazon plans to acquire French package-delivery company Colis Privé.
With Amazon reportedly looking to make its disruption move soon in the logistics game, what is their rationale, and how would it affect the major carriers?