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August 10 2022

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Fulfillment, Amazon prepares the conquest: in the US it has already overtaken FedEx

Bezos' "cannibal" company is already filling up on e-commerce, and will slowly eat its' old allies' in logistics by itself.

Gianluca Ricciodi Gianluca Riccio
in Technology
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logistics
October 25, 2021
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Amazon is not primarily known as a logistics company, but there is a fact that should be considered a signal, not so weak, of the future "expansionist aims" of the giant founded by Jeff Bezos. And the signal is simple, for those who want and know how to read it: in the USA, in 2020 the Seattle company shipped more packages than FedEx.

Why is this important, in my opinion? Logistics is a $ 1,5 trillion business and has long been controlled by a handful of key companies. “Few but good” (in some cases not even good). In the US, these players are called FedEx, UPS and the national postal service. From last year it is clear that Amazon has definitely started to conquer this sector.

A look at the data

logistics
Chronicle of an invasion in the logistics sector: someone is about to take a single bite of the opponents. - data from a Pitney Bowes analysis

The Amazon now has 21% of the US shipping market, just behind UPS (24%) and already abundantly in front of FedEx (16%). The USPS, the US postal service, remains dominant with 38%. Until? All the other players in the logistics sector represent only 1% of the market.

Amazon's rise in the logistics sector is remarkable and indicative. Until 2014 it relied on FedEx and UPS for its deliveries, and had ZERO market share. Since then, Bezos has invested resources in building a network of warehouses, trucks, planes and delivery personnel. He even designed and made the Rivians, its vehicles with dimensions and internal divisions optimized for logistics.

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Cannibal strategy

Having strengthened its “armed” arm in the field of shipping, Amazon has simultaneously stolen orders (and money) from other shippers. Now, the company is transforming shipping from a cost to a source of income by offering its logistics capabilities as a service.

Currently Amazon still leans on other forwarders for last mile deliveries. In 2020, of the 4,2 billion packages Amazon sold, 2,8 billion were passed on to other companies. His conquest campaign is not over yet: if I were to tell you, however, what competitors should do to react to this state of affairs, I would not know where to start. Their fate seems to me simply sealed.

What to say? Amazon dominates in the e-commerce sector. More than half of every dollar spent in the US on e-commerce goes into this company's pockets.

Now it is the logistics sector that is in Bezos' sights: if it gives me so much, in a few years it will end in the same way: then the wave will move to Europe.

tags: amazonshipments
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