Amazon officially leapfrogged United Parcel Service and FedEx as the largest private doorstep delivery and logistics operation in the U.S. following Thanksgiving.
The Seattle-based e-commerce organization fulfilled more residential deliveries than FedEx in 2020 and nipped UPS in 2022. According to reports, UPS handled 5.3 billion packages last year and slumped to 3.4 billion through Thanksgiving 2023. To date, FedEx Express and Ground fiscal data hovered around 3 billion. Amazon fulfilled 4.8 billion home deliveries before Thanksgiving. The operation is currently on pace to ship 5.9 billion packages by year’s end.
“There’s not a lot of perceived value in chest-thumping on being the biggest,” a former Amazon logistics executive reportedly said.
The irony of the situation is that Amazon relied upon UPS and FedEx to fulfill its home deliveries 10 years ago. Back in 2019, members of the FedEx leadership team literally mocked Amazon’s business model, claiming it could never achieve its current status. A CEO fired back at Amazon’s senior vice president of worldwide operations, Dave Clark, after a social media post riled FedEx’s boss.
“You can’t just overnight decide, ‘I’m going to pick up from every person in the world and every business in the world and be able to deliver it to every other.’ It’s fantastical,” FedEx CEO Fred Smith reportedly said. “What I understand about him, he’s a very hard-nosed guy, and he’s a smartass. If he wants to take a shot, take a shot.”
On the freight side of the equation, Amazon is again outpacing the competition. A recent list of the Top 50 freight operations in the U.S. placed Amazon at the top of the leader board. UPS and FedEx again trail the e-commerce marketplace giant at number one and two, respectively. Amazon’s reported freight revenue for 2022 exceeded $117.7 billion, a stunning 23 percent of its total revenue. This seemingly improbable growth comes at a time when freight rates are flat and consumer confidence has been in retreat.
Much of Amazon’s success can be traced to a policy that was open arms to entrepreneurs creating delivery franchises, with startup money as low as $10K. Now, Amazon supports upward of 200,000 U.S. drivers. The quasi-governmental U.S. Postal Service still leads all private-sector delivery companies. It handles hundreds of millions of doorstep deliveries for Amazon, UPS, and FedEx. But it’s no longer “fantastical” to imagine that could also change.
Sources:
https://www.conference-board.org/topics/consumer-confidence
https://www.wsj.com/articles/fred-smith-created-fedex-now-he-has-to-reinvent-it-11571324050
https://www.ttnews.com/articles/2023-global-freight-column
https://www.wsj.com/business/amazon-vans-outnumber-ups-fedex-750f3c04?page=1
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