Amazon is now a bigger shipper in the U.S. than FedEx
Amazon is not primarily known as a logistics company, but in 2020 the company shipped more parcels than FedEx.
Why it matters: Logistics is a $1.5 trillion business — and it has long been controlled by a handful of key players, like FedEx, UPS and the U.S. Postal Service. Now Amazon is poised to conquer it.
What's happening: Amazon has 21% of the U.S. shipping market — right behind UPS (24%) and ahead of FedEx (16%). The USPS remains dominant with 38%, and all other shippers account for just 1% of the market, according to Pitney Bowes, which tracks the global shipping and e-commerce industry.
- Amazon's rise is remarkable, as it had zero share of the U.S. shipping market as recently as 2014, and it relied on legacy shippers like FedEx and UPS for all of its deliveries.
- Since then, Amazon has poured resources into building a network of warehouses, trucks, planes and delivery drivers. As it strengthened its own shipping arm, Amazon took its business away from the other shippers.
- Now, the company is turning shipping from a cost to a source of revenue by offering its logistics capabilities as a service.
But, but, but: Amazon still leans on legacy shippers for the last mile, Supply Chain Dive reports. That means even though more packages are coming from Amazon's shipping apparatus, they're getting passed off to other companies along the way.
- In 2020, a record 4.2 billion parcels originated from Amazon, per Pitney Bowes data. About 2.8 billion of them were passed to other companies for last-mile delivery.
What to watch: Amazon is dominant in e-commerce, earning about half of every dollar spent on online shopping in the U.S. Look for this same dominance from the tech giant to hit the shipping industry soon.