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https://www.wsj.com/articles/amazon-to-launch-delivery-service-that-would-vie-with-fedex-ups-1518175920?mod=djemalertTECH

"Shipping with Amazon" and will see the tech giant picking up packages from businesses and delivering them to customers.

Amazon expects to roll out the new delivery service in Los Angeles in coming weeks with third-party merchants that sell goods via its website, according to the people. Amazon then aims to expand the service to more cities as soon as this year, some of the people say.

Maybe all the rumors about another 100 767F orders is true.

https://www.marketwatch.com/story/fedex ... 9?mod=bnbh says:

Shares of mail delivery services slid in premarket trade Friday, after The Wall Street Journal reported that Amazon.com Inc. AMZN, +0.07% is gearing up to launch its own delivery service for businesses, putting it in direct competition with the industry's two big players. FedEx Corp. shares FDX, -5.21% slid 4.7% and United Parcel Service Inc. UPS, -5.33% fell 5.8%.

So, if nothing else, the market is spooked...

More info w/o subscription needed: http://www.businessinsider.com/amazon-p ... ups-2018-2

There is a significant difference between having some planes flying around, and offering a true end to end logistics service. That said, ups and fedex have had a lock on the US market for so long, some competition would be good for them. Even if just the threat of it...

that said, I’ve never understood why so many people like Amazon. It’s just an online Walmart. They drive down margins and commoditize cheap imported stuff. I think it’s so weird it’s so popular. *shrug*

BlatantEcho wrote:

I’ve never understood why so many people like Amazon. It’s just an online Walmart. They drive down margins and commoditize cheap imported stuff. I think it’s so weird it’s so popular. *shrug*

In a word - friction, or lack thereof. It's not just cheap imported stuff. I've order high end video gear, high end furniture and repair parts from Amazon. I don't don't need to worry if the vendor is legitimate, or shipping rates, or shipping by great circle routes. My order shows up 2 days later. Note that this applies to items actually sold by Amazon, and with a Prime account.

I've also used Walmart Online. They are making a valiant effort, but have a ways to go.

I think where Amazon and Walmart fall down are sales by third parties and shipping by gig type delivery companies like Prestige.

BlatantEcho wrote:

There is a significant difference between having some planes flying around, and offering a true end to end logistics service. That said, ups and fedex have had a lock on the US market for so long, some competition would be good for them. Even if just the threat of it...

The article tells us for now they're just focusing on bringing goods from sellers into their distribution channel. That's the low hanging fruit.

that said, I’ve never understood why so many people like Amazon. It’s just an online Walmart. They drive down margins and commoditize cheap imported stuff. I think it’s so weird it’s so popular. *shrug*

More people are buyers than sellers and of course the like driving down margins and commoditizing stuff.

My perspective is different: I've been a customer since 1996 and I've been wondering why it's taking so long for some people to catch on.

I think Amazon has been a disruptive force for most of those 20 years, and their going to keep being disruptive for years to come.

Once again, this is media hysteria over an issue that they don't understand. this is little more then doing warehouse fulfillment for others, which they have done forever, but without the warehouse. And what the media miss entirely is that, as the service was explained, it merely puts Amazon in the position of the shipping broker. That is, more than likely, Amazon is going to use fedex and UPS to move quite a bit of this business. They have no overnight capability, they don't have air capability in to most of the country, and they continue to use fedex and UPS extensively, as it appears they will with this service. They want to be in the cat bird seat, but they don't wanna be doing all the work.

Revelation wrote:

My perspective is different: I've been a customer since 1996 and I've been wondering why it's taking so long for some people to catch on.

I was a customer since half.com days where I sold my textbooks. So, I guess I’ve seen, and used it for 21 years

I had amazon delete my account a few months ago.
I found it to be of no value - and I had no interest in using it ever again. (They don’t make it easy for you to delete an account!)

Our company sells stuff on there, it just seems like a store for lazy consumers (which is why it’s popular with the masses, I totally get that)

Anyway, I’m just not sure why fedex or ups would be worried. Sounds like very different models of business? No?

Interestingly, for my Prime orders that are sold or fulfilled by Amazon I only get UPS occasionally nowadays, and very rarely FedEx; I mostly get Amazon Logistics with some USPS.

Amazon is opening up their shipping services to sellers who have their own warehouses, offering them Amazon Logistics as a shipping option. For addresses outside the Amazon Logistics delivery range, the last mile will mostly be handled by the U.S. Postal Service.

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

BlatantEcho wrote:

Revelation wrote:

My perspective is different: I've been a customer since 1996 and I've been wondering why it's taking so long for some people to catch on.

I was a customer since half.com days where I sold my textbooks. So, I guess I’ve seen, and used it for 21 years

Half.com was acquired by eBay, though yeah, it was a lot more like Amazon Marketplace, so I suppose I could understand the confusion. (Where did half.com go? Oh, it must be amazon marketplace. Wrong, in any event.) I remember the first "integration"-- eBay just gave all the half sellers ebay accounts, and more or less entirely abandoned the half.com single-listing multiple-sellers style and let Amazone become huge in the market.

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

I call BS on that.

Sears would have started with a high cost structure (labor, infrastructure) and the wrong technology base.

Unless they blew it all up and started from scratch, then they would not have those "advantages".

Amazon already has their own delivery service, AMZL_US, and they’re horrible.

Prediction: Amazon will buy Atlas &/or ATI and will also become a point to point package shipping Co. along with everything else.

Maybe not now, but somewhere down the road. UPS/FDX watch out

flyguy84 wrote:

Amazon already has their own delivery service, AMZL_US, and they’re horrible.

This is exactly what Amazon will be offering to third party sellers with their own warehouses. If the customer's address is outside the Amazon Logistics (AMZL US) delivery range, the USPS will handle the last mile.

Agree with flyguy, Amazon logistics is HORRIBLE.

Its like they hire Joe off the street and, if he feels like it, he goes out and delivers, and if tired and finishes the job tomorrow or whenever. Just awful.

Look at some of these comments that are popping up on the web on this news, and I agree with these statements 100% because these are my experiences, too:

"Most of the time, AMZL orders are delivered by a guy who looks homeless, in a threadbare hoody, driving an unmarked car. I wonder if they even do background checks on these folks, or just take whoever shows up at the warehouse?"

"The incompetence at AMZL is nothing short of breathtaking. I expect at least 1-2 orders a month to be lost, delayed by a week, or falsely claimed to be "Delivered", now that AMZL is delivering a serious chunk of my Prime orders. It makes me completely question the value of Prime membership."

". Amazon's in-house delivery is straight up ******* atrocious for me. At least they increasingly allowing shipments straight to the local post office for the few times I use Amazon. I can skip the horrific dance of dealing with their drivers."

" So many times I'll get a notification that something is out for delivery, and then it shows up the next day. Or the delivery day will just randomly change from the guaranteed delivery date."

Not to nit pick, but it's actually very pertinent to this conversation...Amazon does not own their own final mile delivery company with the only exception being a very small test in Seattle, WA. They instead rely solely upon a network of third party logistics carriers. I believe this is about to change, based upon the jobs I see posted on Amazon's career website. They're actively recruiting final mile talent which spells trouble for the 3PL couriers, not so much UPS and Fedex. That said, the introduction of a true owned final mile system would allow the possibility of providing their own end-to-end shipping and delivery service, perhaps becoming a viable competitor to UPS and Fedex.

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as UPS and FedEx today would be Sears. That will be debated in business schools for decades.

Fixed it for ya.

Could we see Jeff make moves to purchase ABX and Atlas? Seems like the next logical move.

flyguy84 wrote:

Amazon already has their own delivery service, AMZL_US, and they’re horrible.

Completely disagree.

Goodyear wrote:

Could we see Jeff make moves to purchase ABX and Atlas? Seems like the next logical move.

They already own a portion of each company (ATSG and Atlas). Owning them outright, in my view, would make zero sense.

It will be an interesting evolution if true. Amazon will need fedex, usps, and ups over the next ten years no matter what.

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

I agree with the poster that Sears would not have been able to pull it off. OTOH this shoul have become their business model. I remember getting packages from Sears and Montgomery Wards in the olden days. Of course Kodak, Xerox, and et cetera were not able to pull off entering the digital age either.



"Our company sells stuff on there, it just seems like a store for lazy consumers (which is why it’s popular with the masses, I totally get that)" Some people like to shop at stores, a lot do not. Don't know why you would call them lazy. I usually know what I want, and do not need to look at 500,000 things I do not want.

USPS, UPS, FedEx all do a great job delivering to our door at our fairly large condo. The other delivery people do a crappie job, and do not take the time to qualify for a code to let themselves into the building. I'll get a phone call when I am out of state, "could you buzz me in to deliver a package, me: who are you, xyz delivery, me: of course not". So the package disappears.

tcfc424 wrote:

Not to nit pick, but it's actually very pertinent to this conversation...Amazon does not own their own final mile delivery company with the only exception being a very small test in Seattle, WA. They instead rely solely upon a network of third party logistics carriers. I believe this is about to change, based upon the jobs I see posted on Amazon's career website. They're actively recruiting final mile talent which spells trouble for the 3PL couriers, not so much UPS and Fedex. That said, the introduction of a true owned final mile system would allow the possibility of providing their own end-to-end shipping and delivery service, perhaps becoming a viable competitor to UPS and Fedex.

Not quite. They also have a squadron of "Flex" drivers. These are the unmarked cars people are remarking about. They are part time employees, as are most of the sort workers. Of course, this will vary by region/district, I get deliveries from all of them in my area. They get a lot of credit for hiring all these employees but conditions and pay are no better than Walmart (for example), maybe worse in some cases. They also announced yesterday 2 hour delivery from Whole Foods. What happened to drone deliveries?

BlatantEcho wrote:

that said, I’ve never understood why so many people like Amazon. It’s just an online Walmart. They drive down margins and commoditize cheap imported stuff. I think it’s so weird it’s so popular. *shrug*

When greedy customers who will sell their mother for "a good deal" meet a greedy businessman who has done that many times, it's a match made in heaven. The funniest thing is that both sides think they win, while the only winner is the 18-year-old Mr. Ho Lee Fook of Guanzhou province who just got a job at the newest assembly plant in Shanghai.

I agree about Amazon Logistics. They are terrible. I have had to write to Jeff Bezos twice in the past year to complain about their poor delivery. My notes never get to Jeff of course but they get far enough up the management chain (i.e. executive customer service) that I find it more worthwhile than just contacting regular customer service agents (who seem to do nothing but wring their hands and ask for forgiveness and another chance).

My second notice to Bezos seemed to do the trick (knock wood). They changed the delivery carrier for my packages to UPS and USPS. For now, that seems to be working better and I just hope it lasts.
Also, is it just me or is anyone else getting concerned about Amazon becoming too monopolistic? They keep getting involved in more and more aspects of American life. They started out as just a book store then expanded into offering just about any other product you can imagine. Then they started manufacturing their own devices (i.e. Fire, Kindle, Alexa etc.) and are now moving into food and product delivery. I am sure that we will see them turn up in even more economic areas in the future.

I don’t mind seeing a company rewarded for innovation and hard work but it seems to me that they are intent on getting as many tentacles into the American economy and American life as Samsung has in South Korean life:

http://money.cnn.com/2017/02/17/technol ... index.html

Wow... Lots of anger on Amazon. I have used them since 1998 when I moved to a city that had, via zoning, blocked Boarders books. Since the little bookstores didn't carry what I wanted... Amazon.

When I complain about no delivery, I notice drivers have a replacement. Most of my stuff is USPS, plain cars, FedEx, and then UPS.

Amazon is going for low hanging fruit. This allows someone else's warehoused goods to be seen.

Will they buy the rumored 100 767s? That is what I want to know.

Lightsaber

Revelation wrote:

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

I call BS on that.

Sears would have started with a high cost structure (labor, infrastructure) and the wrong technology base.

Unless they blew it all up and started from scratch, then they would not have those "advantages".

How you figure? They had the infrastructure set up, just replace the physical catalog with an online presence. The costs (labor) could be taken out over time. We are talking about a time when Sears was still the #1 retailer, barely with Walmart on its heels.

BREECH wrote:

...while the only winner is the 18-year-old Mr. Ho Lee Fook of Guanzhou province who just got a job at the newest assembly plant in Shanghai.

If you must be prejudiced, could you at least throw a little creativity/originality into it?

SuperGee wrote:

Also, is it just me or is anyone else getting concerned about Amazon becoming too monopolistic?

[Froot loop milk shooting out of nose....] LOL.....no, it's not just you. It's pretty clear what AMZN's intentions are.

tcfc424 wrote:

Not to nit pick, but it's actually very pertinent to this conversation...Amazon does not own their own final mile delivery company with the only exception being a very small test in Seattle, WA. They instead rely solely upon a network of third party logistics carriers. I believe this is about to change, based upon the jobs I see posted on Amazon's career website. They're actively recruiting final mile talent which spells trouble for the 3PL couriers, not so much UPS and Fedex. That said, the introduction of a true owned final mile system would allow the possibility of providing their own end-to-end shipping and delivery service, perhaps becoming a viable competitor to UPS and Fedex.

You perfectly describe the situation with almost all freight forwarders in regard to final mile. IMHO that is what Amazon is looking to become, a freight forwarder albeit with their own fleet of aircraft running some of the city to city pairs.

william wrote:

Revelation wrote:

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

I call BS on that.

Sears would have started with a high cost structure (labor, infrastructure) and the wrong technology base.

Unless they blew it all up and started from scratch, then they would not have those "advantages".

How you figure? They had the infrastructure set up, just replace the physical catalog with an online presence. The costs (labor) could be taken out over time. We are talking about a time when Sears was still the #1 retailer, barely with Walmart on its heels.

Agree. They pioneered mail order, even able to buy a build it yourself house kit at one time. It should have worked, but just my .02, they weren't known for more upscale goods in certain merchandise areas.

william wrote:

How you figure? They had the infrastructure set up, just replace the physical catalog with an online presence. The costs (labor) could be taken out over time. We are talking about a time when Sears was still the #1 retailer, barely with Walmart on its heels.

I think you should read more about what Amazon does and how it does it. It's a lot more than an "online presence". You can't simply take the labor costs out of Sears's catalog infrastructure, those costs are built in to the way they did business. You can't just scale up Sears's infrastructure and expect it to do what Amazon does in terms of throughput and volume at similar cost, it would have come crashing down a long time ago. Amazon grew to this scale because they started out aiming for the targets they're now hitting ~20 years ago. Sears would have needed to tear down what they were doing and redo it from scratch with similar goals. In the process they would have had to be willing to "eat your young" ie let the retail business suffer. It's hard to imagine them ever doing this.

william wrote:

Amazon started a year after Sears shut down its catalog division. Sears was advised to take the slow selling catalog division on the then new internet. Sears management balked though they had the logistics and warehouses set up to sell online. Amazon started a year later and the rest is history. The moral of the story is that if Sears management had vision, what you know as Amazon today would be Sears. That will be debated in business schools for decades.

Yep, Sears was considered a logistics wonder. Don't forget all the rural catalog stores they had that carried just a handful of physical goods like lawn mowers, appliances, tvs. It was debated more than 10 years ago. Sears also eff'd up by killing sporting goods, specifically hunting supplies and Guns when mail order guns sales were banned. In store gun sales alone would have bolstered their bottom line the past decade. Oh well.

Guys - this is an aviation forum, can we keep the subject of Amazon's business ethics and service quality to one side for now and rejoice in what would possibly be an order of huge significance to the continued future production of the 767 ?

If Amazon wants to be a true UPS/Fedex type operation then they had better take a long hard read at DHL's failed attempt to become the third player in the US market. There are a milion potential ptifalls in trying to cobble together that kind of network today. UPS already had the ground network when they decided to start their own airline. Fedex invented the overnight delivery business and enjoyed a long monopoly that allowed them to develop their network from scratch without competition. BY the time UPS added the air business Fedex was already well established. Amazon has neither advantage. They don't even have anything remotely like the Airborne and DHL networks that DHL had to work with. Granted, DHL made huge mistakes but they didn' have to start from scratch either. Amazon would be wise to stick to what they excel at.

Flaps wrote:

If Amazon wants to be a true UPS/Fedex type operation then they had better take a long hard read at DHL's failed attempt to become the third player in the US market. There are a milion potential ptifalls in trying to cobble together that kind of network today. UPS already had the ground network when they decided to start their own airline. Fedex invented the overnight delivery business and enjoyed a long monopoly that allowed them to develop their network from scratch without competition. BY the time UPS added the air business Fedex was already well established. Amazon has neither advantage. They don't even have anything remotely like the Airborne and DHL networks that DHL had to work with. Granted, DHL made huge mistakes but they didn' have to start from scratch either. Amazon would be wise to stick to what they excel at.

Funny you mention that, I had my UPS Sales rep come by today and because of this thread told him about Amazon's expansion in Logistics. He laughed and stated they should have learned from DHL. Its easy to move packages from fulfillment to hub to station, its that last mile from station to home that is the hard part. Apparently Amazon is using alot Uber drivers presently to deliver packages.

BlatantEcho wrote:

They drive down margins and commoditize cheap imported stuff.

You just described almost every other business out there ...especially those that are answerable to shareholders.

william wrote:

Flaps wrote:

If Amazon wants to be a true UPS/Fedex type operation then they had better take a long hard read at DHL's failed attempt to become the third player in the US market. There are a milion potential ptifalls in trying to cobble together that kind of network today. UPS already had the ground network when they decided to start their own airline. Fedex invented the overnight delivery business and enjoyed a long monopoly that allowed them to develop their network from scratch without competition. BY the time UPS added the air business Fedex was already well established. Amazon has neither advantage. They don't even have anything remotely like the Airborne and DHL networks that DHL had to work with. Granted, DHL made huge mistakes but they didn' have to start from scratch either. Amazon would be wise to stick to what they excel at.

Funny you mention that, I had my UPS Sales rep come by today and because of this thread told him about Amazon's expansion in Logistics. He laughed and stated they should have learned from DHL. Its easy to move packages from fulfillment to hub to station, its that last mile from station to home that is the hard part. Apparently Amazon is using alot Uber drivers presently to deliver packages.

Might want to consider reply #6 above...

william wrote:

Funny you mention that, I had my UPS Sales rep come by today and because of this thread told him about Amazon's expansion in Logistics. He laughed and stated they should have learned from DHL.

UPS managers once laughed at the notion of FedEx becoming a serious competitor. UPS managers once laughed at the notion of UPS operating its own airline.

DHL's domestic US failure has little to with Amazon. Some things to ponder:
- Amazon has a market cap of 7-10 times that of UPS, FedEx, and DHL
- Amazon is leveraging innovation unseen at UPS such as pioneering the use of drones, the use of Uber, 7 day delivery, etc. UPS OTOH has been in strategic reactionary mode for decades now instead of innovation mode.
- Most importantly UPS, FedEx and DHL only offer a service. Amazon OTOH offers products to sell, in addition to a (future) delivery service.

Hence my previous post relating UPS vision to that of Sears decades ago.

Goodyear wrote:

Could we see Jeff make moves to purchase ABX and Atlas? Seems like the next logical move.

No way ABX after the way Amazon got screwed y them during peak 2016. ATI is probably more likely.

More unmarked Enterprise vans blocking roads at will and parking on the wrong side of the street? Hooray!

william wrote:

Its easy to move packages from fulfillment to hub to station, its that last mile from station to home that is the hard part. Apparently Amazon is using a lot of Uber drivers presently to deliver packages.

Everybody seems to assume that AMZ wants to clone FedEx or UPS. I don't get that at all. I see AMZ doing a dozen different delivery models. Urban is delivery to a locker at the local Whole Foods market. Rural is USPS. Suburban is third party gig delivery. UAVs are for PR stories and viral videos. etc.

Amazon is zooming to break up status. Modern Day Ma Bell.

Spacepope wrote:

Goodyear wrote:

Could we see Jeff make moves to purchase ABX and Atlas? Seems like the next logical move.

No way ABX after the way Amazon got screwed y them during peak 2016. ATI is probably more likely.

The company that owns ATI also owns ABX. http://www.atsginc.com/Subsidiary_Companies.html

Although I would love to see Fedex and UPS get some good competition, not sure if Amazon is the one. Overall, FedEx and UPS do a good job, but their pricing is out of control. As a big user of their services from the wholesale end, they are about the only companies that can get away with automatically raising their prices on January 1st, year after year, regardless of economic conditions. They also get away with charging fuel surcharges, even though gas prices are at record lows.Why? Because they can. Not sure why the government has not stepped in to stop what I feel is collusion, but I guess they don't see it the way I do.

Regarding Amazon, it is another company I have a lot of experience with from the wholesale side and not the consumer side. Hands down, this is the WORST company you could possible work with, but it is also indicative of the way corporations are going. I would say their communication is horrible, but I cannot even give them that much credit. Why? Because there is no communication. This is a really bad company with bad organization and zero customer service. Their idea of customer service is a call center in India that has no clue what they are doing. Their A/P and A/R departments could not be any worse and nothing would please me more than to walk up to Jeff Bezos one day and ask him how one of the world's richest people can have a business that is so bad. I have been working with Amazon since they started and they just could not be any worse. There is not one department at this company that I could give a low rating, because every department is sub-bad. The thought of them going into the logistics business in their current form, would be an accident waiting to happen.

LOWS wrote:

Spacepope wrote:

Goodyear wrote:

Could we see Jeff make moves to purchase ABX and Atlas? Seems like the next logical move.

No way ABX after the way Amazon got screwed y them during peak 2016. ATI is probably more likely.

The company that owns ATI also owns ABX. http://www.atsginc.com/Subsidiary_Companies.html

And as different companies under ATSG, with different unions, one (ATI) could be sold off, if needed.

crownvic wrote:

Although I would love to see Fedex and UPS get some good competition, not sure if Amazon is the one. Overall, FedEx and UPS do a good job, but their pricing is out of control. As a big user of their services from the wholesale end, they are about the only companies that can get away with automatically raising their prices on January 1st, year after year, regardless of economic conditions. They also get away with charging fuel surcharges, even though gas prices are at record lows.Why? Because they can. Not sure why the government has not stepped in to stop what I feel is collusion, but I guess they don't see it the way I do.

Regarding Amazon, it is another company I have a lot of experience with from the wholesale side and not the consumer side. Hands down, this is the WORST company you could possible work with, but it is also indicative of the way corporations are going. I would say their communication is horrible, but I cannot even give them that much credit. Why? Because there is no communication. This is a really bad company with bad organization and zero customer service. Their idea of customer service is a call center in India that has no clue what they are doing. Their A/P and A/R departments could not be any worse and nothing would please me more than to walk up to Jeff Bezos one day and ask him how one of the world's richest people can have a business that is so bad. I have been working with Amazon since they started and they just could not be any worse. There is not one department at this company that I could give a low rating, because every department is sub-bad. The thought of them going into the logistics business in their current form, would be an accident waiting to happen.

Our per piece profit is in the form of pennies per package at brown. Hardly overcharging.

flyPIT wrote:

william wrote:

Funny you mention that, I had my UPS Sales rep come by today and because of this thread told him about Amazon's expansion in Logistics. He laughed and stated they should have learned from DHL.

UPS managers once laughed at the notion of FedEx becoming a serious competitor. UPS managers once laughed at the notion of UPS operating its own airline.

DHL's domestic US failure has little to with Amazon. Some things to ponder:
- Amazon has a market cap of 7-10 times that of UPS, FedEx, and DHL
- Amazon is leveraging innovation unseen at UPS such as pioneering the use of drones, the use of Uber, 7 day delivery, etc. UPS OTOH has been in strategic reactionary mode for decades now instead of innovation mode.
- Most importantly UPS, FedEx and DHL only offer a service. Amazon OTOH offers products to sell, in addition to a (future) delivery service.

Hence my previous post relating UPS vision to that of Sears decades ago.

Market cap isn’t really evidence of anything other than that Wall Street will give tech companies money for anything regardless of the fundamentals of the business. Tesla is Exhibit A. So, the issue isn’t paying for some hypothetical logistics expansion. The issue is why Amazon needs to be more in the logistics business than it already is. Amazon does a good job of leveraging different logistics solutions in different settings. Is their current model failing?

So a couple of thoughts here...

1) I don't believe Amazon will move to acquire or create a cargo airline of their own. They are happy, and should be happy, with the 49% stake in 2 cargo carriers. While they do not control the majority of shares, they might actually be the controlling shareholder...unless the other mixed investors with 51% are all banded against them. Controlling an airline would require all Amazon employees to meet the criteria set forth by the FAA which includes 10 year background, et al. They could potentially break off a segment that would be Amazon Air (which they already brand the operation) however actually separating the company has not been something Amazon has done or seems inclined to do. Long story short...49% is plenty.
2) Don't underestimate Amazon's ability to revolutionize the final mile situation. I have broad experience in this arena, and while there are certain basics, I have seen some very different methods as of late...and beyond that I have heard some industry-changing ideas. No one knows (or if they do they can't say) what Amazon is cooking up, but I don't expect it to be a UPS or FedEx type operation. It will be an Amazon operation. Think about when they turned the textbook industry upside down.
3) Freight forwarders and common carriers have no stake in the packages and cargo they transport. They charge a fee for a service. Amazon OTOH would have a stake in the packages and cargo they transport. They incur costs, just like any other distributor. Being able to more directly affect those costs...and to ship other packages to help subsidize their operation can affect them in two ways...they reduce their shipping costs and they gain ancillary revenue. In this context, they would not be dependent upon that ancillary cost...but if they fly a 767 from ONT-IND and it's 2/3 full of their product...why not fill the other 1/3 will additional revenue?
4) The 3PL couriers that everyone hates (myself included) are a case of the ends justifying the means. Sure, 5-10% of their deliveries may be problematic. The other 90% run without a hitch though...and at a much lower risk and cost than if that is handled in house. I have seen the bastardization of in-house delivery, and I have seen the blowback from eliminating that in-house delivery. I think for Amazon, this is all about scale and density. The company I worked with that eliminated in-house delivery viewed it as an expense and was unable to reduce cost due to a lack of density. They outsourced to 3PL couriers and lost almost 40% of their delivery customers within 6 months. In the case of Amazon...they have never had in-house delivery, and I guarantee their density is 5-10 times higher than what I saw. That should make this a feasible prospect.
5) I wish them well. This will not spell the demise of UPS or Fedex...at least, not yet. It will affect their business, and it may drive them into an innovative phase, but on its face, its not a replacement.

I will speak my thoughts from 5 years ago. Amazon is taking over the world as we know it. They're changing the way the world works. Some like it, some hate it, but they are innovative and they are challenging the way you look at everything.

Maybe it's just my area but Amazon isn't the one posing the real threat to FedEx and UPS if you ask me. The real threat is coming from the USPS. I'm big on ordering from Amazon. Probably 90% plus is now delivered by the USPS. Amazon is moving their stuff and then letting USPS do the final mile which I think they're actually pretty good at. The USPS may be a lot less reliable when it comes to moving something a 1000 miles but very, very rarely do they screw up when it's given to them a mile down the road.

I mean, Amazon really has them bending over. I even got something on MLK Day. The USPS is giving them Sundays and now federal holidays too.

jetblueguy22 wrote:

crownvic wrote:

Although I would love to see Fedex and UPS get some good competition, not sure if Amazon is the one. Overall, FedEx and UPS do a good job, but their pricing is out of control. As a big user of their services from the wholesale end, they are about the only companies that can get away with automatically raising their prices on January 1st, year after year, regardless of economic conditions. They also get away with charging fuel surcharges, even though gas prices are at record lows.Why? Because they can. Not sure why the government has not stepped in to stop what I feel is collusion, but I guess they don't see it the way I do.

Regarding Amazon, it is another company I have a lot of experience with from the wholesale side and not the consumer side. Hands down, this is the WORST company you could possible work with, but it is also indicative of the way corporations are going. I would say their communication is horrible, but I cannot even give them that much credit. Why? Because there is no communication. This is a really bad company with bad organization and zero customer service. Their idea of customer service is a call center in India that has no clue what they are doing. Their A/P and A/R departments could not be any worse and nothing would please me more than to walk up to Jeff Bezos one day and ask him how one of the world's richest people can have a business that is so bad. I have been working with Amazon since they started and they just could not be any worse. There is not one department at this company that I could give a low rating, because every department is sub-bad. The thought of them going into the logistics business in their current form, would be an accident waiting to happen.

Our per piece profit is in the form of pennies per package at brown. Hardly overcharging.

Oh please... You are not the customer paying your extortion prices. You guys raise your rates commensurate to the union contracts you have to adhere to. Your problem has turned into my problem. Twenty years ago, that 18" square package that went coast to coast is exactly twice the price it is today. If the price of milk, eggs or a battery has not gone up 100% in the same period, then why does yours? You may want to do some research. What's my alternative? FedEx? Unfortunately, the same story there. You may also want to look at the insane profits you guys are raking in at the expense of your customers. Yes, you overcharge, because you can.