Some folks were surprised when Bloomberg News and other news sources reported yesterday that Amazon was experimenting with their own delivery network which could come at the expense of their current business partners UPS and FedEx. The reality is that Amazon’s move into establishing their own delivery network has been in the works for years now.
The real question that remains to be answered is whether Amazon can and/or is willing to build a complete delivery network here in the US and therefore no longer have a need to use UPS or FedEx for their domestic deliveries. We doubt that will ever come to pass completely, but we are sure that Amazon will at some point in the future be a major delivery service provider in many of the major metropolitan areas of the US. They have been building and fortifying those metro delivery networks for years now and will be a strong delivery force in many major metro area’s for sure.
There also remains the possibility that Amazon will compete head to head with both UPS and FedEx for parcel deliveries from other shippers at some point in the future. We believe that Amazon has felt for quite some time that the costs to deliver parcels through UPS and FedEx are more costly than what Amazon believes they should be. Perhaps if Amazon does compete head to head with the two parcel giants, they may find out that reducing those costs may not be as easy as it seems.