If someone asked you which company runs the biggest delivery service in the U.S., which one would you say? Well, by early 2022, one Amazon executive said his company will be overtaking both FedEx and UPS.
The online retailer was already close to that goal. It delivered more than 3.5 billion packages the year before the pandemic, which was enough to make its shipping business two-thirds the size of UPS.
Now, buoyed by a recent study by Transimpact that showed 32.2% of consumers are doing more than half of their holiday shopping on Amazon, the company has never been in a better position to take the lead.
“We expect we will be one of the largest carriers in the world by the end of this year,” Clark said in an interview on CNBC’s “Squawk Box.” “I think we’ll probably be the largest package delivery carrier in the U.S. by the time we get to the end of the year, if not in early ‘22.”
Building slowly but successfully
Ever since 2013, when Amazon trusted other carriers to deliver its packages and wound up with a holiday shipping catastrophe, the company has been investing in its logistics and fulfillment operations.
In fact, Amazon got so good at the delivery game that it began shipping cargo for third-party companies, reportedly including the U.S. Postal Service. Now, with 400,000 drivers, 40,000 trucks, 30,000 vans, and 70 planes, it’s proven how serious it is about delivery.
“Since they’re servicing delivery routes already, it’s almost all marginal revenue to pick up and deliver third party shipments,” said ViewFromTheWing’s Gary Leff. “That puts them in a position to undercut competitor pricing. They’ve already tested a lower-priced and lower-fee competitor to overnight shipping services in Los Angeles and London.”
Holiday shipping tests Amazon
While Amazon appears to be improving its delivery game, the influx of packages that it will have to handle during the holidays is sure to test its capabilities. One ConsumerAffairs reviewer thinks the company still has some work to do before it’s crowned the king of all delivery.
“My family and I have two Prime memberships. Overall, my experiences with Amazon have been positive and we have given the company tens of thousands of dollars in business,” wrote Joseph of South Plainfield, N.J.
“I do understand that the pandemic and the shortage of qualified labor can result in less than perfect results, but packing fragile merchandise in unpadded envelopes is totally unacceptable. In the last two weeks I received three shipments packed in envelopes and in each case the product was damaged. Amazon needs to fix this at once.”