In his column on logistics John Bevacqua, VP of Logistics at AMS Fulfillment, often refers to the decisions and the direction taken by the parcel duopoly of FedEx and UPS. These two companies have been the powerhouses in getting our packages delivered and the decisions they make have a significant impact on fulfillment.
Recently the headlines have pointed to some interesting changes in logistics. For example, an article in SupplyChainDrive.com talks about Amazon passing FedEx in volume. In an effort to understand what this might mean for AMS and its clients, and what it might mean for shoppers who are increasingly concerned about the supply chain, we have asked the “Freight Freak” if he would comment on this change. Has Amazon Logistics passed FedEx in volume?
John B was happy to comply, and his viewpoint is as follows:
Amazon Logistics’ fast growing logistics network has recently, or will soon, surpass the duopoly’s market share. It has surpassed FedEx for the total packages delivered to consumers and with the additional assets being added to their network, soon to surpass UPS. It comes as no surprise that even though Amazon has not yet fully completed a direct compete with the duopoly throughout the US, it’s definitely going to be their next big step in the logistics industry. AMS will be one that’s ready to add this service once it is offered.
Is there room for another small package powerhouse carrier to compete with likes of UPS, FedEx, and DHL? Absolutely! As every small parcel carrier is challenged with capacity issues, it’s exactly what is needed in the industry to harness the out of control rates and surcharges offered by what I refer to as a duopoly – FedEx and UPS.
Several years ago we heard rumors about Amazon purchasing a shipping company. Some were thinking it could be UPS, but it didn’t seem possible. Fast forward to the current day and Amazon Logistics has become a formidable threat to the duopoly. The hub and spoke infrastructure that has been built in almost every major city, citing what the article from CNBC calls a “fly wheel effect” will only propel this logistics network to be one of the world’s most efficient and fastest “end- to- end” delivery systems, meaning from warehouse to the consumer’s doorstep.
As Amazon independent delivery drivers are beginning to flirt with the idea of handling outside shipments, I can only conclude that we soon will see a third powerhouse to compete with the Duopoly.
Thank you John B. “Freight Freak” for the insider view!
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About the Freight Freak: John Bevacqua is the VP of Logistics at AMS Fulfillment. His area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.