Amazon set to launch own delivery service, competing with UPS & FedEx

Posted:
in General Discussion edited February 9
Amazon is reportedly kickstarting "Shipping With Amazon," or SWA, a delivery service for other businesses that will take on industry leaders UPS and FedEx.




SWA will launch in Los Angeles within the next few weeks, initially servicing merchants that do business through Amazon.com, Wall Street Journal sources said on Friday. Some of the people indicated that it could expand to more cities by the end of 2018.

Amazon will allegedly try to undercut UPS and FedEx on pricing, which could shake up the parcel industry if the company can scale infrastructure. The company has been gradually moving into self-run deliveries by hiring drivers, setting up air cargo, and delving into ocean freight. It has even been toying with in-home deliveries for people willing to pay for a special lock and camera setup.

Apple currently relies on both UPS and FedEx for U.S. deliveries, and might be tempted to add Amazon to the mix if it will lower overall costs. At the same time, that would funnel money towards a chief competitor.

The two companies are increasingly stepping into each other's territory. Most recently Apple has entered the smartspeaker space with the HomePod, and laid the groundwork for a 2019 TV slate that could challenge Amazon Prime Video.
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Comments

  • Reply 1 of 59
    emig647emig647 Posts: 2,395member
    Competition is good. Be interesting to see where this goes. I feel like shipping prices from some of these places are a bit out of touch.
    randominternetpersonracerhomie3
  • Reply 2 of 59
    quote: “At the same time, that would funnel money towards a chief competitor”

    That's nothing new for Apple. Apple is ‘tunneling’ lots of money to it rival Samsung thru chips. memories and displays.
    leavingthebiggmike1
  • Reply 3 of 59
    zoetmbzoetmb Posts: 2,341member
    I just heard a news report on this.   According to what I heard, it's only for overnight shipping.   What percentage of people pay for that today (aside from businesses)?  And that's a huge capital and labor cost for Amazon - I expect they'll lose money on this for years to come.   But I suppose if they can get other companies to use the service, it covers the cost of trucks and labor that they're already investing in anyway.
  • Reply 4 of 59
    macguimacgui Posts: 934member
    No doubt Amazon will workout scheduling and routes that work to their best advantage with as little 'loss leader' as possible.

    I use Prime and Amazon Locker as much as possible but often Prime products get marked 'Not available to be shipped to your address' so I have to use a street address which isn't convenient. But Amazon will dot every i and cross every t possible.

    I think it was Mac Connection years ago that sent every order, no matter how small, by FedEx overnight. Great while it lasted, but it couldn't.
    randominternetperson
  • Reply 5 of 59
    My rural mail carriers sometimes can't fit all the packages in their personal vehicles, so the packages get delivered the next day.

    UPS will sometimes run behind and claim that "the receiving business was closed" (my address is residential) and deliver the next day.

    The good thing is that I rarely have to pay for Amazon Prime as a result. Every time a delivery is late, Amazon gives me either a discount or a free month of Prime. I don't mind waiting an extra day for a package to arrive.
    patchythepirate
  • Reply 6 of 59
    SoliSoli Posts: 8,374member
    emig647 said:
    Competition is good. Be interesting to see where this goes. I feel like shipping prices from some of these places are a bit out of touch.
    1) How do you gauge that the cost of shipping an item across the country or around the world in 2 days as being "out of touch"? How would you gauge the price if you have no idea how much cargo planes, commercial jets with some cargo area, OTR trucks, local trucks, sorting facilities, and all the other infrastructure and personnel that goes into getting a package from A to B over an incredibly complex network, over a massive distance? I've studied this and I couldn't begin to claim any such thing.

    2) Have you considered how many packages Amazon ships through these services? Are you familiar with economies of scale? What if Amazon pulling out of, say, UPS, means they can't pack transport vehicles to the same extent, or if revenue goes down that they have to close stores and other facilities, lose staff, or cut hours of operations to try to stay in the black? What if this results in having to raise prices because they've lost their largest customer, and one that kept things moving through the channel, so now you not only have higher costs, but also slower delivery and worse customer service? Think of what Amazon has done to the B&M stores. You'd think that they'd have great customer service since it's the one thing they can offer that Amazon can't, and yet Amazon's chat-based CSRs have been great and going into a Staples has been a nightmare, IMO.
    mike1
  • Reply 7 of 59
    metrixmetrix Posts: 227member
    I am still upset that they destroyed all book stores so going to avoid them. 
    frankiewatto_cobra
  • Reply 8 of 59
    frankiefrankie Posts: 369member
    metrix said:
    I am still upset that they destroyed all book stores so going to avoid them. 
    I kinda of agree.  Now that they dont have the tax benefit working for them it seems their prices aren't what they used to be. 
    Seriously what does Amazon do?  They are just a giant middle man.  That's it. 
    watto_cobralolliver
  • Reply 9 of 59
    SoliSoli Posts: 8,374member
    frankie said:
    metrix said:
    I am still upset that they destroyed all book stores so going to avoid them. 
    I kinda of agree.  Now that they dont have the tax benefit working for them it seems their prices aren't what they used to be. 
    Seriously what does Amazon do?  They are just a giant middle man.  That's it. 
    And bookstores or any other big box store aren't middle men? Even a company, like Sears, which puts their name on countless products, mostly sold goods from other vendors.
    edited February 9 zroger73anantksundaramdasanman69
  • Reply 10 of 59
    I'm fairly sure USPS is also an industry leader. Although that means everyone who ships things qualifies.
  • Reply 11 of 59
    In other news, Southwest Airlines is not happy.
    airnerdking editor the gratemike1
  • Reply 12 of 59
    AFAIK, Amazon has been delivering its own stuff (especially Prime) for a while here in the UK
    That means it leaved the depot around 10:30 and gets to me late afternoon.


    Soli
  • Reply 13 of 59
    Amazon's stock price is based on constant expansion vs. actually being successful at making money, so this is the new shiny thing to dangle for investors. They can pretend for awhile that they're "taking on" FedEx and UPS.
    retrogustowatto_cobratokyojimu
  • Reply 14 of 59
    SoliSoli Posts: 8,374member
    Amazon's stock price is based on constant expansion vs. actually being successful at making money, so this is the new shiny thing to dangle for investors. They can pretend for awhile that they're "taking on" FedEx and UPS.
    So you think it’s a ruse and that they have no plans or desire to creating their own shipping company?
  • Reply 15 of 59
    Coincidentally I just saw this story on the local Austin news. I believe the packages were being delivered from a local Amazon fulfillment center by a contracted third-party delivery person or business, not by of the the big shippers like FedEx or UPS. So basically, the stuff was being shipped "by Amazon". I hope this is not an early indication of Amazon's in-house shipping services.

    http://www.wfaa.com/news/local/denton-county/amazon-packages-dumped-in-justin-neighborhood/515058827
  • Reply 16 of 59
    airnerdairnerd Posts: 567member
    In other news, Southwest Airlines is not happy.
    I thought about this too.  "Shipped by SWA" is extremely confusing, and Southwest does cargo shipping as well.  
    watto_cobra
  • Reply 17 of 59
    airnerdairnerd Posts: 567member
    As for their shipping, as long as I get my 2 day shipping I don't care what color truck delivers it.  With that said, I HATE when Amazon ships with UPS because it doesn't arrive until 8pm for me.  If Amazon delivers it then I get it before noon.  Fedex is around noon, and USPS is as well.  

    But that's just me :)
    watto_cobra
  • Reply 18 of 59
    We live in the SF East Bay Area. The thing that blows my mind is the Same Day Delivery that Amazon periodically offers on some items -- consider the infrastructure (vehicles, scheduling, inventory, warehousing, etc) necessary to support that.
    SpamSandwichwatto_cobra
  • Reply 19 of 59
    lukeilukei Posts: 326member
    Soli said:
    frankie said:
    metrix said:
    I am still upset that they destroyed all book stores so going to avoid them. 
    I kinda of agree.  Now that they dont have the tax benefit working for them it seems their prices aren't what they used to be. 
    Seriously what does Amazon do?  They are just a giant middle man.  That's it. 
    And bookstores or any other big box store aren't middle men? Even a company, like Sears, which puts their name on countless products, mostly sold goods from other vendors.
    Amazon spends US$15Bn+ a year on R&D. As an example they created the Smart Speaker market. They do something...
    edited February 9 Solimike1
  • Reply 20 of 59
    "The two companies are increasingly stepping into each other's territory. Most recently Apple has entered the smartspeaker space with the HomePod, and laid the groundwork for a 2019 TV slate that could challenge Amazon Prime Video."

    Somehow I doubt Apple will be stepping into this territory.
    watto_cobra
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