Here’s how Amazon could dethrone UPS and FedEx in the US last-mile delivery market (AMZN)
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Outside of the US Postal Service (USPS), FedEx and UPS have dominated the domestic logistics industry — and in particular, the last-mile of the delivery — for decades. On a quarterly earnings call in 2016, FedEx estimated that itself, UPS, and USPS executed a whopping 95% of all e-commerce orders.
But rapidly rising volumes have put the pair of legacy shippers in a bind. E-commerce sales have risen over 50% and are projected to continue their ascent into the next decade. High volumes are already straining shippers’ networks — UPS struggled to bring consumers their parcels on time due to higher-than-anticipated package volume, which upset some big-name retail partners, including Macy’s, Walmart, and Amazon. As online sales surge further, package volumes will outstrip legacy shippers’ capacities, creating space for new entrants.
Amazon is uniquely well-positioned to dethrone UPS and FedEx’s duopoly. It’s built up a strong logistics infrastructure, counting hundreds of warehouses and thousands of delivery trucks.
Further, as the leading online retailer in the US, it has a wealth of data on consumers that it can use to craft a personalized delivery experience that’s superior to UPS and FedEx’s offerings. Amazon must act soon, however, as UPS and FedEx are hard at work fortifying their own networks to handle the expected surge in parcel volume.
The longer the Seattle-based e-tailer delays the launch of a delivery service, the more it runs the risk that these legacy players will be able to defend their territory.
In a new report, Business Insider Intelligence, Business Insider’s premium research service, explains how the age of e-commerce is opening …read more
Source:: Business Insider