Amazon is using delivery services such as UPS and FedEx less and less. The e-commerce giant delivers almost half of its parcels itself.
Amazon has created an impressive logistics infrastructure in just a few years. The company operates 390 distribution centres, 50 aircraft, 300 trucks and 20,000 delivery vehicles worldwide, and researchers from market research firm Rakuten Intelligence calculated that Amazon now delivers 48 per cent of its parcels itself. The figure was 15 per cent at the beginning of 2017. USPS delivers 33 per cent of Amazon's parcels, UPS 16.5 per cent and FedEx 1.6 per cent.
'Gigantic logistics operation'
Alex Pellas, logistics expert at Rakuten Intelligence calls Amazon 's logistics operation "huge". "Amazon accounts for about 40 per cent of all e-commerce. If they handle half of their own shipments, that's 20 per cent of the entire market."
Amazon is also snatching market share from carriers by offering its logistics services to third parties. According to Pellas, the giant can offer lower rates than UPS and FedEx because its planes take to the skies for Amazon's own cargo anyway.
Collaborate, copy, fire
"Amazon's advance in transport is now a classic model of the company: first collaborate with competitors, then copy them and then fire them," says Jaimee Minney of Rakuten Intelligence.
Amazon responded to Rakuten Intelligence's figures. "The figures do not accurately reflect the distribution of shipments between Amazon and our carrier partners," the company stated.
FedEx no longer flies for Amazon
Transport companies seem to see the pinch and are reducing their reliance on Amazon. For instance, FedEx no longer flies for the e-commerce giant in the US. The carrier decided not to renew its contract with Amazon because it wants to "focus on a broader e-commerce market".
