Amazon now delivers 50% of its packages on its own
San Francisco: In a serious threat to package delivery giants like FedEx and UPS, Amazon is now delivering 50 per cent of its packages itself especially in the urban centres globally, media reported.
According to Morgan Stanley estimates reported first by CNBC, analysts estimate Amazon Logistics — the company’s in-house shipping and delivery service — will soon overtake UPS and FedEx in the total volume of packages delivered in the US.
Jeff Bezos-led company still relies on third-party couriers for last-mile deliveries in rural regions.
Amazon Logistics now ships more than 2.5 billion packages a year in the US, while FedEx ships 3 billion and UPS delivers 4.7 billion.
Amazon’s deliveries will probably reach 6.5 billion by 2022 for $10 a package, the analysts said, meaning a massive loss of $65 billion in revenue for UPS, FedEx and the US Postal Service.
Amazon’s number doubled in just the last year alone, from delivering about 20 percent of all of its own packages to now about half (46 per cent).
After losing air-shipping contract of global courier company FedEx amid competition, e-commerce major Amazon has added 15 cargo aircraft to its fleet, aiming to reach 70 planes by 2021.
In a bid to expand its airborne ambitions, e-commerce giant Amazon is investing $1.5 billion in building a three million square-foot Prime Air airport outside Cincinnati in Kentucky as a parking garage for a 100 cargo jets.
“We’re investing $1.5 billion in our new air hub to get you your packages faster. Three million square feet, and it’s going to create 2,000 jobs. And if you’re guessing that driving a front loader was fun, you’re right! #amazon #prime,” Bezos tweeted recently.
Amazon has a few dozen planes flying several hundred flights per week while UPS and FedEx have hundreds of planes flying thousands of flights.