UPS and FedEx Set for Big Win with Amazon
Amazon’s move towards one-day shipping is likely to be a big win for UPS and FedEx, but not in the way you think. A superficial glance might lead one to assume Amazon is going to increase one-day shipping contracts with the logistics providers, but that is not so. Amazon is building out its own network to do so. So how will it help FedEx and UPS’ beat-up stocks? The answer is that other ecommerce companies will need to increase their shipping speeds in order to better compete with Amazon, and in order to do so, they will be paying for a lot more one-day shipping through UPS and FedEx.
FINSUM: This is quite an interesting angle and one that makes a lot of sense. Walmart, Target, and many other big retailers will need to rely on UPS and FedEx to meet the one-day shipping challenge that will be required to stay competitive with Amazon.
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