
Amazon’s Newest Ambition: Competing Directly with UPS and FedEx - endswapper
http://www.wsj.com/articles/amazons-newest-ambitioncompeting-directly-with-ups-and-fedex-1474994758
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Declanomous
Why would Amazon care if they damaged their reputation with Fedex and UPS?
They can just do what UPS and Fedex do when it is too expensive to deliver a
package somewhere -- turn it over to the USPS. Amazon is already using USPS to
deliver packages on Sundays, which is win-win-win. Amazon wins, USPS wins, and
the consumers win. Amazon's home delivery seems to work well where it's been
rolled out, and I don't see competitive barriers to rolling it out elsewhere.

I think the article fails to cover a lot of areas where Amazon will have a
competitive advantage over UPS and Fedex. First of all, Amazon will be
vertically integrated. They can control the packaging. They can control which
warehouses are used to store items. This could lead to better packing
efficiency in delivery vehicles, and could make automated loading of vehicles
easier. If you have a particular route that is usually 110% full or 40% full,
you could either move more items to that warehouse or take some away. Plus,
Amazon can incentivize cheaper shipping options dynamically. Will the marginal
cost of this order be incredibly high because you'll need a second truck for a
particular route? Discount one day shipping, or offer two day shipping to
their work instead.

On top of all that, Amazon doesn't have unionized employees. That's a huge
advantage when you are trying to reduce costs. Not only are their employees
wages probably less, but they also don't have contracts that reduce planning
ability, like fixed routes, etc.

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johnwheeler
I think this is more an end game move rather than a new ambition.

The best way to take over FedEx and UPS wouldn't be to compete with them
directly from the start but make them dependent on your business, so they'd be
in less of a position to fight when you have the resources to compete.

