Amazon never settles until it dominates a market
Amazon is reportedly working on shipping cargo for third-party companies in an effort to beat UPS and FedEx at their own game.
This means that the online retailer giant will start moving items that aren’t bought in its online store simply because its logistics prowess has improved. There are even unconfirmed reports that the company is already shipping goods for the U.S. Postal service, according to CNBC.
Amazon started shipping goods bought from its online store back in 2014, and since then, it’s grown its shipping business to include 400,000 drivers, 40,000 transport trucks, 30,000 vans, 70 planes and more. It even recently opened up a new Air Hub in Kentucky that cost around $1.5 billion USD (roughly $1.8 billion CAD) to ship products more efficiently.
Last year, Amazon created its own custom electric delivery van with Rivian to help lower its emissions while making it more productive to deliver packages. Investments like these have helped Amazon gain ground on FedEx and UPS. The tech giant already ships over 72 percent of its own packages, and we can assume it plans to get that number to 100 percent in a few years.
Analysts who spoke to CNBC expect Amazon to launch this new ‘logistics as a service’ platform in the U.S. over the next year and a half. It’s unclear if the online retail giant also has plans to bring it to Canada.
The scary part for FedEx and other shipping companies is that since Amazon is already running so many shipping routes and has other revenue streams to supplement its logistics business, it can massively undercut the competition’s prices.
That said, some analysts predict that Amazon won’t ship items as universally as FedEx or UPS and instead will prioritize certain sizes and only run on its established.
Source: CNBC