UPS expected to deliver 750 million packages during last year's holiday season, it said in December - 40 million more than its year-before shipments of 712 million packages.
Amazon is planning to debut a package-delivery service for businesses that's created to compete directly with FedEx and UPS, according to a new report. Investors see this as a foreboding move threatening UPS and FedEx.
Amazon did not respond to a request for comment.
SWA will start small, only serving third-party merchants that already sell on Amazon.
"But for the vast majority of products moved, it's nearly certain that they're going to be moved, they're going to be delivered by one of those three networks and some of the smaller regional players, as far as the eye can see", Smith added.
The program is still in its early stages, so plans haven't been finalized.
FedEx shares declined 1.65 percent; UPS was down 2.64 percent; and Amazon lost 0.81 percent. Response was, at best, muted: UPS noted that it continues to support Amazon among its many clients, and Fed Ex largely clammed up. Prime Now debuted in Austin, Dallas, Virginia Beach and Cincinnati, and Amazon plans to expand it nationwide over the course of the year. Last October, the Seattle-based company said it would deliver packages on behalf of third-party sellers on its website.
On the surface, it may seem like Amazon is on a quest for retribution but at least for the time being, I think Amazon's venture into shipping is more about self-preservation. The company has also moved into delivery and logistics through its leasing of aircraft and ocean freight equipment. That's how it launched its profit-machine AWS cloud service company. Last year, the company spent as much as $20 billion ensuring its products made it to customers. To ensure that it keeps to its promised deadlines, the company has to pay premiums on deliveries. If this happens, then the company will really be able to show massive cost savings on deliveries. Deliveries can include fresh produce and meats along with many other items. UPS' fourth quarter earnings in 2017 were $18.83 billion dollars. "Amazon is making large investments in B2B commerce and, if businesses want to compete and maintain their market share, they'll need to offer an online buying option as well".
Recent moves by Amazon have led some industry observers to speculate the online retailer is poised to launch its own parcel delivery service soon. Analysts say that this panic is premature.