Amazon doesn’t need to take over the last mile of ecommerce delivery, but it does need to reduce its massive shipping cost burden in order to maintain its recent run of profitability, which is the logic behind its recent logistics moves.
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.
In a move aimed at better understanding the inner workings of the same-day delivery model, UPS has purchased a stake in crowdsourced delivery startup Deliv. Just how UPS will leverage this relationship and what it learns remains to be seen, but it surely has its eye on the burgeoning same-day delivery space, including competitor FedEx’s service for Neiman Marcus and others.
Two new surveys demonstrated the growing expectation from millennials for same-day shipping, while relatively few retailers are offering it.
UPS’s Q2 earnings beat analyst estimates, even as revenue was slightly below expectations. Its B2B business gained from ecommerce, omnichannel and returns.
Endicia CEO Amine Khechfé shares some more best practices for making returns of items purchased online easier for consumers.