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Does Amazon have a sliver of a chance of amassing the scale necessary to replace UPS or FedEx? The two shipping companies have a global reach built up over decades. The Wall Street Journal reports that it may be hard to beat the two big players in the industry.
Amazon has only leased up to 40 planes and has roughly 300 warehouses in the U.S., including fulfillment centers, sortation centers and delivery stations, according to supply-chain consultancy MWPVL International Inc. The company today mostly contracts and leases with delivery couriers rather than owning its own assets, a limiting factor, say analysts.
Amazon is “far away from having enough capacity to handle all of its own shipping,” much less having excess capacity to sell to shippers outside its third-party merchants “and truly start competing” with UPS and FedEx,” Wolfe Research analyst Scott Group wrote in a Friday note.
The shipping giants have a sizable head start over Amazon. UPS has shuttled packages for more than a century, since just before the introduction of Ford’s Model T. FedEx began more than 40 years ago.
FedEx has roughly 650 aircraft, 150,000 trucks, 400,000 employees and 4,800 operating facilities globally to handle about 12 million shipments a day. UPS’s larger operation handles more than 20 million packages a day with service to more than 220 countries and territories globally. Its fleet includes more than 500 owned and leased aircraft and more than 100,000 package cars and other vehicles to deliver packages.
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