Illustration: Aïda Amer/Axios
Amazon is inching closer to being able to send you everything, from any store.
Driving the news: The company’s CEO of worldwide consumer business, Dave Clark, told CNBC this week that Amazon will “probably be the largest package delivery carrier in the U.S.” by early 2022 if not the end of this year.
- Through its Fulfilled By Amazon service, the company is already shipping orders for places like eBay and Walmart in Amazon packaging.
Why it matters: The popularity of e-commerce has changed the needs of the shipping industry. Amazon, one of the drivers of that popularity, built a logistics network to support its own growing needs — so much so that it's able to take on extra capacity.
State of play: UPS and FedEx were born in the world of business-to-business deliveries and that’s been the mainstay of their service, Marc Wulfraat, president of supply chain consultancy MWPVL International, tells Axios.
- One truck can make a stop at one location and deliver 200 packages.
- With e-commerce increasing demand, these companies now need more workers and trucks to deliver one or two packages to 200 locations.
Where Amazon could win business: By offering more shipping and logistics to third-party vendors and smaller companies that don’t have big enough shipping needs to get favorable rates elsewhere.
- Amazon could enter the equation to provide lower-cost options (especially if it’s along existing Amazon routes), says Pat Donnelly, a senior analyst at Third Bridge.
Yes, but: Underpinning growth is workers. Given the near-constant reports of Amazon’s unhealthy labor practices, achieving that vision may come at an unquantifiable human cost.
What they’re saying: "Eventually, you're going to run out of people willing to do this work … to go out there and bust their ass for 10 hours a day," says Wulfraat.
- Amazon did respond to a request for comment.
- A FedEx spokesperson declined to comment.
- UPS spokesperson Glenn Zaccara tells Axios the company "will not speculate or comment on another company’s business projections," and adds, "Amazon continues to deliver packages for its customers and is also an important customer of UPS. We see it as a mutually beneficial relationship."
What to watch: To really go toe-to-toe will require much more investment, but as we've seen, "Amazon is not afraid to lose money when ramping up a business. And so that would very much fit into their playbook," says Donnelly.