Will Amazon Kill FedEx?

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I don't know if Amazon will kill FedEx and UPS but those two sure are going to feel the loss of Amazon's delivery dollars, that's for sure. Hell, Amazon could just cut to the chase and buy FedEx or UPS and be done with it. ;)

Providing near-instant gratification on Amazon’s scale isn’t cheap. Last year the company spent $11.5 billion on shipping—nearly twice what it did two years ago. Along with leasing jets and buying trailers, Amazon has opened more than 28 sorting centers, 59 delivery stations that feed packages to local couriers, and more than 65 Prime Now hubs stocked with best-selling items that can be rushed to customers around the world, according to MWPVL International, a Montreal-based supply chain consultant. “This year we estimate Amazon is going to sell 7.2 billion items,” says Gene Munster, an internet industry analyst at Piper Jaffray. “In 2020, which is only four years away, we expect them to sell 12.6 billion items.”
 
Although I cannot get Amazon Instant still, their branded delivery drivers are seemingly doing my deliveries now. So far it's worlds better than Ensenada to the point that I'm okay with it.

Wasn't it UPS recently that complained that going to individual resident addresses was becoming too much?
 
Shipping to individual addresses is an expensive proposition as each stop cost money. Now if you are regularly dropping off 10 packages a day this is no big deal. But lets say 1 package to every household about once a week, and they start costing you serious time and gas. And that cost money. In fact, I once read somewhere it's barely a break even cost wise. But less packages overall means less full cargo planes which makes shipping for everyone more expensive.

Train systems had the same logistic issues with LCL (Less than container load) shipments. However with trains, you had/have to send someone to the depot and pick up their shipment. Intermodal has changed that quite a bit. But LCL shipments still exist and are placed in boxcars typically.

BTW: This is why FedEx charges more to drop off at a residential address.

As such if Amazon develops their own shipping, FedEx and UPS will not suffer for it that much.
 
OpenSource said:
FedEx and UPS will have to adapt, be bought or go away.
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Like DHL. I remember they were all over the place here (NY), now if you see 1 DHL van in 6 months it's alot. I hated DHL as they were always late by days, and the packages seemed like they went through a war zone before delivery.
 
Amazon has been doing a lot of its own hub to hub shipping, USPS, UPS and FedEx are doing most of the last mile stuff, I think Amazon wants to do all of its own hub to hub and has been using independent drivers to fill the gap with the normal shippers for last mile. I have noticed this a lot of weekends, weekday it is USPS or UPS, but weekends I get more independent drivers dropping off items. This is why Amazon had interest in Drones for delivering, cuts out USPS/UPS and all the crying they do, they can go 24/7 with a large enough fleet and means no having to pay the other drivers. Shipping is a MASSIVE cost for Amazon, they spend more on shipping than most other competitors spend on everything, it is really shocking.
 
Confirmed. Carrier: AMZL US. delivered my Witcher 3 order yesterday. I have a Prime Now hub less than a mile from my Apt so it makes sense to me.
 
I live 5 miles away from an Amazon dist site. Why can't they have local pick up like newegg?
 
acidrain97 said:
I live 5 miles away from an Amazon dist site. Why can't they have local pick up like newegg?
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I've wondered this as well. Seems like it could save them money if they had a office front that allowed pickups. I'd bet we'll see this in the future from them.
 
Yep noticing white panel vans dropping Amazon packages here lately in Plano TX
 
DigitalGriffin said:
Shipping to individual addresses is an expensive proposition as each stop cost money. Now if you are regularly dropping off 10 packages a day this is no big deal. But lets say 1 package to every household about once a week, and they start costing you serious time and gas. And that cost money. In fact, I once read somewhere it's barely a break even cost wise. But less packages overall means less full cargo planes which makes shipping for everyone more expensive.

Train systems had the same logistic issues with LCL (Less than container load) shipments. However with trains, you had/have to send someone to the depot and pick up their shipment. Intermodal has changed that quite a bit. But LCL shipments still exist and are placed in boxcars typically.

BTW: This is why FedEx charges more to drop off at a residential address.

As such if Amazon develops their own shipping, FedEx and UPS will not suffer for it that much.
Click to expand...

That's why you see USPS delivering more and more UPS or FedEx packages to homes. lt's that last mile so to speak. The problem is the future is geared for home deliveries and is growing. Amazon shows us that. It will eventually effect UPS and FedEx unless they evolve into something more like distro hubs. Remember the more hands and or companies that touch it the cost also rises.
 
I have an Amazon pick up location about 12 miles away. Prime shipping gets most things to my door in two days already and I don't have to spend the time and gas. I see certain cases where if it was close people would pick up thier items. Monday I had an ignition coil sent same day prime for 3.99 extra. To my door! For 4 bucks im still staying home.
 
Wasn't there just an article on the front news page here a few weeks to a few months ago (can't remember when) that stated that UPS and FedEx really don't want the home delivery business. That they make so little money on it it's almost worthless to them, and that they'd almost rather only do business deliveries?
 
Amazon has two facilities in Lexington, plus customer service in Winchester.
UPS greatly expanded their facility size due to Amazon. They are right across the street from each other. I did night sort there many years ago for a summer. 90% of packages that I handled came from Amazon.
I really wish that Amazon had a will-call counter. 96% of what I order ships from Lexington. It'd be nice to swing by on the way home from work.
 
Zarathustra[H] said:
Wasn't there just an article on the front news page here a few weeks to a few months ago (can't remember when) that stated that UPS and FedEx really don't want the home delivery business. That they make so little money on it it's almost worthless to them, and that they'd almost rather only do business deliveries?
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Yeah. It's what happens when you pay a delivery driver nearly 30/hr plus union headaches
 
alxlwson said:
Yeah. It's what happens when you pay a delivery driver nearly 30/hr plus union headaches
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Is that really accurate? Wow, that's the equivalent of a $60K a year salary, more than I made as a starting salary out of college, as an engineer, at the top of my class. (granted that was 13 years ago now, but it feel like just yesterday)

And for a job that requires almost no skill other than driving.

I would have expected them to be in the $10 to $12 range...
 
DigitalGriffin said:
Shipping to individual addresses is an expensive proposition as each stop cost money. Now if you are regularly dropping off 10 packages a day this is no big deal. But lets say 1 package to every household about once a week, and they start costing you serious time and gas. And that cost money. In fact, I once read somewhere it's barely a break even cost wise. But less packages overall means less full cargo planes which makes shipping for everyone more expensive.

Train systems had the same logistic issues with LCL (Less than container load) shipments. However with trains, you had/have to send someone to the depot and pick up their shipment. Intermodal has changed that quite a bit. But LCL shipments still exist and are placed in boxcars typically.

BTW: This is why FedEx charges more to drop off at a residential address.

As such if Amazon develops their own shipping, FedEx and UPS will not suffer for it that much.
Click to expand...
It may actually help their perception also. December shipping UPS red = 2-3 weeks
 
Zarathustra[H] said:
Is that really accurate? Wow, that's the equivalent of a $60K a year salary, more than I made as a starting salary out of college, as an engineer, at the top of my class. (granted that was 13 years ago now, but it feel like just yesterday)

And for a job that requires almost no skill other than driving.

I would have expected them to be in the $10 to $12 range...
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You go destroy your body for 30 years humping packages and see if $12/hour is worth it (hell, do it for a year). People forget the amount of stress the body takes delivering packages all day (and in the amounts they do). This is one thing that is forgotten more than any aspect of jobs when people complain about wage is health hazards. Its not talked about nearly enough and while you and others may think that a delivery driver is just a stupid job that should be paid next to nothing, that is really not the case.
 
doz said:
You go destroy your body for 30 years humping packages and see if $12/hour is worth it (hell, do it for a year). People forget the amount of stress the body takes delivering packages all day (and in the amounts they do). This is one thing that is forgotten more than any aspect of jobs when people complain about wage is health hazards. Its not talked about nearly enough and while you and others may think that a delivery driver is just a stupid job that should be paid next to nothing, that is really not the case.
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Fair point. I was thinking of it as built in free exercise, so I have to spend less time at the gym, but honestly I have no idea what repetitive lifting of packages does to the body.

I know in my job I sit way more than is healthy though.
 
Zarathustra[H] said:
Fair point. I was thinking of it as built in free exercise, so I have to spend less time at the gym, but honestly I have no idea what repetitive lifting of packages does to the body.

I know in my job I sit way more than is healthy though.
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It's hard work man. Not really much exercise. Lots of repetitive motion and impact injury.

Truthfully, the pricing model probably needs to change.
 
doz said:
You go destroy your body for 30 years humping packages and see if $12/hour is worth it (hell, do it for a year). People forget the amount of stress the body takes delivering packages all day (and in the amounts they do). This is one thing that is forgotten more than any aspect of jobs when people complain about wage is health hazards. Its not talked about nearly enough and while you and others may think that a delivery driver is just a stupid job that should be paid next to nothing, that is really not the case.
Click to expand...

That's what health Insurance is for. Same people at the same company pay the same amount whether they make $12 hr or $30 hr for specific health coverage's. It's called manual labor and people have been doing it forever. Yes $30 an hr is to much to pay a driver in my opinion. What do you think will happen if those residential address deliveries go away, think they'll need all those $30 hr drivers then?
 
twonunpackmule said:
Unions will stop the progress. It's what they're good at.
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As with all things there are good ones and bad ones. Unions have done a lot for us that we take for granted over the years, so don't dismiss them outright.

Things like:
  • 40 hour work week
  • overtime pay
  • Lobbied for health and safety protections for workers

...just to name a few.

There are - of course - many stories of bloated unions that have lost their ways, and just result in inflexible work environments where guaranteed breaks on time every time get in the way of getting things done, and making it almost impossible to fire someone who isn't doing their job.

I think the key - rather than being anti union - is to be anti BAD union.

Unions were originally founded to protect their people from the abuses of the free wheeling industrialists of the industrial revolution. And trust me, even if you think you do, you REALLY don't want to go back to those bad old days before the worker protections unions fought for.
 
Zarathustra[H] said:
As with all things there are good ones and bad ones. Unions have done a lot for us that we take for granted over the years, so don't dismiss them outright.

Things like:
  • 40 hour work week
  • overtime pay
  • Lobbied for health and safety protections for workers

...just to name a few.

There are - of course - many stories of bloated unions that have lost their ways, and just result in inflexible work environments where guaranteed breaks on time every time get in the way of getting things done, and making it almost impossible to fire someone who isn't doing their job.

I think the key - rather than being anti union - is to be anti BAD union.

Unions were originally founded to protect their people from the abuses of the free wheeling industrialists of the industrial revolution. And trust me, even if you think you do, you REALLY don't want to go back to those bad old days before the worker protections unions fought for.
Click to expand...


But we have all of that now. Today's unions are nothing like yesteryears. Between the DoL and OSHA, unions are no longer needed, and haven't been needed in over 80 years
 
  • 40 hour work week
  • overtime pay
Being a salaried employee has made me exempt from both of these. Although I have been at the same job for over 19 years.
 
Ford Automotive actually established the 40 hour work week and increased salary without the need of Unions. So, it's kind of a false flag to wave.
 
once they build their army of delivery drones, they won't need UPS or FedEx
 
twonunpackmule said:
Ford Automotive actually established the 40 hour work week and increased salary without the need of Unions. So, it's kind of a false flag to wave.
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Henry Ford was also a bit of a worker wage activist for his time and has been quoted as saying:

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wage possible."

That last bit would hardly find its way into most CEO's, board members or shareholders agendas these days.

The fact that it happened in a company whose leader believed strongly in paying his workers well should be treated as an outlier rather than the norm.
 
Zarathustra[H] said:
The fact that it happened in a company whose leader believed strongly in paying his workers well should be treated as an outlier rather than the norm.
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Something to remember here though is that creates a competitive landscape for employees. With those better working conditions, comes higher competition to be able to work there, allowing that company to pick the best of the best employees for the job. It also creates better incentives for people to do a quality job as well. Now, for other companies to get the best of the best, they have to create favorable working conditions that drive great engineers, laborers, accountants, etc to their company rather than Ford.

Look at the IT industry and the massive perks some of the jobs offer there. That had nothing to do with unions, and everything to do with the free market competing for qualified workers (which were/probably are still lower than what is needed).
 
charold said:
Something to remember here though is that creates a competitive landscape for employees. With those better working conditions, comes higher competition to be able to work there, allowing that company to pick the best of the best employees for the job. It also creates better incentives for people to do a quality job as well. Now, for other companies to get the best of the best, they have to create favorable working conditions that drive great engineers, laborers, accountants, etc to their company rather than Ford.

Look at the IT industry and the massive perks some of the jobs offer there. That had nothing to do with unions, and everything to do with the free market competing for qualified workers (which were/probably are still lower than what is needed).
Click to expand...


And that is great when you are competing for workers with highly marketable skills. I'm lucky enough to be one of those (I usually get a few recruiter calls ever day).

Not everyone is as fortunate to have been in a position to acquire those marketable skills though, and we need to have something that prevents the less qualified labor from being treated like slave labor at starvation wages, and being forced to work in poor conditions without any protections.
 
Bowman15 said:
That's what health Insurance is for. Same people at the same company pay the same amount whether they make $12 hr or $30 hr for specific health coverage's. It's called manual labor and people have been doing it forever. Yes $30 an hr is to much to pay a driver in my opinion. What do you think will happen if those residential address deliveries go away, think they'll need all those $30 hr drivers then?
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Health coverage is going to fix the back or knee surgery you will need? While it will pay for it, what about afterwards when you cannot do your job anymore by the age of 40? Then you are on disability just surviving. I am not a delivery driver, but I do understand that certain jobs carry more risks than others inherently which is why there is a higher cost involved. This would be one of them. Some people will say that it shouldnt be a career. Maybe, but many people make a life doing it. Id like to see you go haul packages around 8-12 hours a day for $12/hour. Bet you would quit (and so would most people).
 
Id like to see you go haul packages around 8-12 hours a day for $12/hour. Bet you would quit (and so would most people).
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In my 20s I loved to do that and I was not payed anywhere near $12/hour.. I felt I was getting payed to work out.
 
I laugh at how much amazon spends on shipping, until I realize they just pass that on to the prime members with higher fees.

They really need to get a handle on using the correct size boxes and stuff. to this day I still get packages 2x 3x 4x 10x the size of the actual item in the box. I can't fathom how much money they throw away in shipping and packaging costs.

I've had stuff the size of a pack of cards come in a box that my 4year old could fit in. crazy I tell you...
 
I have a family member who used to work with my state's Worker's Comp / Vocational Rehab division 16+ years ago. From what I was told back then when discussing the job some, injured UPS and Fedex employees were a very common sight.
 
doz said:
Health coverage is going to fix the back or knee surgery you will need? While it will pay for it, what about afterwards when you cannot do your job anymore by the age of 40? Then you are on disability just surviving. I am not a delivery driver, but I do understand that certain jobs carry more risks than others inherently which is why there is a higher cost involved. This would be one of them. Some people will say that it shouldnt be a career. Maybe, but many people make a life doing it. Id like to see you go haul packages around 8-12 hours a day for $12/hour. Bet you would quit (and so would most people).
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Nobody said they need to do it for $12 hr. but $30 is to much. I'm a professional with a Salary and don't make $30 an hr when calculated out yet I have back and knee issues. Yes I have Insurance and figure on retiring with said issues so this magic $30 for manual labor is just bullshit. You made my point by not making it a career but if they chose to do so then that's on them, not on me or you for preaching for them. We all deserve more money but don't degrade some of us for using our minds to make it instead of muscles.
 
Bowman15 said:
Nobody said they need to do it for $12 hr. but $30 is to much. I'm a professional with a Salary and don't make $30 an hr when calculated out yet I have back and knee issues. Yes I have Insurance and figure on retiring with said issues so this magic $30 for manual labor is just bullshit. You made my point by not making it a career but if they chose to do so then that's on them, not on me or you for preaching for them. We all deserve more money but don't degrade some of us for using our minds to make it instead of muscles.
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If you are a professional with a salary and you say it like that, I would assume you are getting fucked. No offense, just the facts. That said, you cannot honestly believe that after 20 years+ of being a delivery truck driver loading/unloading/carrying/climbing up and down that you will not have some sort of health issue.... It is pretty much a given. Nothing wrong with brains. My wife uses her brain and while I have one, I chose a different path. We both make comparable money (well, she is taking a new job that blows me away). She gets paid her salary because of her schooling, I get paid mine because of the health risks.
 
doz said:
If you are a professional with a salary and you say it like that, I would assume you are getting fucked. No offense, just the facts. That said, you cannot honestly believe that after 20 years+ of being a delivery truck driver loading/unloading/carrying/climbing up and down that you will not have some sort of health issue.... It is pretty much a given. Nothing wrong with brains. My wife uses her brain and while I have one, I chose a different path. We both make comparable money (well, she is taking a new job that blows me away). She gets paid her salary because of her schooling, I get paid mine because of the health risks.
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LOL...you have no idea what I do or where I live and how that relates to my cost of living...I take it economic wage factors is not your strong suit.

They choose that occupation for fucks sake. Nobody is making them do that their entire life. Union's have ruined the paper industry in my area, which basically fucked this generation and the next due to the out of line wages even the lowest broom pushers received. Those kinds of services were never meant to be career long at $30 hr! Why do you think they are having issues breaking even delivering to residential customers. Your sense of entitlement seems a bit warped here. LOL
 
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