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Amazon is preparing to surpass UPS and FedEx next year to become the largest express service provider in the United States

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Dave Clark, CEO of Amazon's global consumer business, said in an interview a few days ago that the company is expected to surpass its long-time transportation competitors UPS and FedEx by the end of this year or early next year to become the largest express service company in the United States and the largest express delivery company in the world. One of the company.




For the past ten years, Amazon has been quietly building a logistics empire, operating its own freight fleet, signing contracts with local express companies, and opening logistics distribution centers across the United States. Due to rising transportation costs, between 2009 and 2018, Amazon's global transportation costs increased 15 times, while net sales increased 7 times, Amazon decided to transfer most of the express delivery business to the company.




Amazon CFO Brian Olsavsky said in 2019 that the company can transport its own packages more efficiently and cheaper than third parties.




Amazon is preparing to surpass UPS and FedEx next year to become the largest express service provider in the United States




But Amazon's shipping ambitions angered its competitors, mainly FedEx. Amazon is one of FedEx's largest customers. According to estimates by Moody Investment Services, the company will deliver about 200,000 Amazon packages per day in 2018 until FedEx announces that it will no longer deliver packages for Amazon in 2019. According to related reports, analysts estimated that Amazon was one of FedEx's least profitable customers because it needed a large number of small express delivery rather than more profitable commercial contracts.




In 2020, Amazon surpassed FedEx in the number of packages delivered. According to Pitney Bowes, compared with FedEx’s 3.3 billion packages, Amazon delivered 4.2 billion packages and started to benefit from UPS and the U.S. Postal Service. Data shows that compared with peer UPS and FedEx, in 2020, Amazon will ship 21% of packages in the United States, UPS will account for 24%, and the U.S. Postal Service will account for 38%.




However, both UPS and FedEx have a larger freight fleet than Amazon, and UPS provides services to corporate customers in multiple industries such as healthcare and automobile manufacturing.




Amazon is preparing to surpass UPS and FedEx next year to become the largest express service provider in the United States




Amazon’s goal is to better control how shoppers’ packages are delivered to their doorsteps. The retail giant now oversees thousands of last-mile express companies that deliver packages exclusively for Amazon, as well as an emerging internal transportation network of planes, trucks and ships. It has also established warehouses and aviation hubs across the country to speed up the delivery of packages.




Amazon's freight business has developed rapidly. According to Digital Commerce 360 data, Amazon shipped 58% of its own packages in 2019, making it the fourth largest express service company in the United States. As of August last year, it is estimated that Amazon has shipped 66% of its own packages.




Amazon's internal delivery business has become a major advantage of this year's holiday shopping season. Due to the ongoing COVID-19, global supply chain crisis and labor shortage, the holiday shopping season is extremely challenging.




Clark said that in addition to using its own trucks and planes, Amazon has been shipping goods to new ports to avoid congestion.




"These things did not happen overnight. Amazon has been building logistics infrastructure and a technology platform to promote logistics development for 20 years, preparing it for today’s challenging freight forwarding situation and helping Amazon to surpass its competitors. Get ready," Clark said.