Amazon Moving Further into FedEx and UPS Sweet Spot – Ground Delivery

January 24, 2019


A third option for last mile ground delivery is becoming more evident as Amazon’s home delivery service, Amazon Shipping, emerges from test into reality. According to the WSJ, Amazon has cut many fees that UPS and FedEx implement such as fuel surcharge, residential delivery and peak surcharges. The WSJ notes that according to Amazon’s marketing pitch to shippers, “Amazon will offer rates that are easier to understand than the pricing systems that UPS and FedEx.” Indeed, our own CEO and Founder, John Haber, was interviewed for the article and said, “If it’s a guaranteed service with none of those surcharges, they’re going to undercut the residential delivery market.” Despite Amazon’s service being a seven day ground delivery option (UPS and FedEx both offer shorter delivery times), the point is that they are competing against two of their supply chain partners. Eventually as Amazon gains traction, we expect that their seven day delivery option will be reduced to a shorter delivery time option. While both FedEx and UPS view Amazon as a good customer, behind the scenes the two companies are working on strategies to keep up and/or compete against Amazon. Recent developments include FedEx’s introduction of Extra Hours. According to the press release, the service helps retailers to fulfill e-commerce orders into the evening and receive late pickups by FedEx Express, with next-day local delivery and two-day shipping to any address in the continental United States. Retailers can extend evening order cutoff times by 5-8 hours, with some as late as midnight, depending on their current order fulfillment process. A FedEx spokesperson told Business Insider, “By providing later pickup times and utilizing next-day local delivery, retailers can fulfill and deliver online purchases to their shoppers faster than their competition.” As for UPS, remember Amazon Key? Well, UPS is offering a similar solution and recently it announced it is expanding its pilot with Latch to ten new cities. In 2017, UPS announced its pilot program with smart lock company Latch that would provide UPS entry to apartment buildings to deliver packages. The difference between Amazon’s offering versus that of UPS’ is that the UPS service allows delivery people to enter into common areas rather than individual apartments like Amazon’s service. The winner in all of this will be the customer in terms of delivery service options, transparency in shipping costs and reduced shipping rates. Amazon ground delivery is finally here!

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Amazon Moving Further into FedEx and UPS Sweet Spot – Ground Delivery

January 24, 2019


A third option for last mile ground delivery is becoming more evident as Amazon’s home delivery service, Amazon Shipping, emerges from test into reality. According to the WSJ, Amazon has cut many fees that UPS and FedEx implement such as fuel surcharge, residential delivery and peak surcharges. The WSJ notes that according to Amazon’s marketing pitch to shippers, “Amazon will offer rates that are easier to understand than the pricing systems that UPS and FedEx.” Indeed, our own CEO and Founder, John Haber, was interviewed for the article and said, “If it’s a guaranteed service with none of those surcharges, they’re going to undercut the residential delivery market.” Despite Amazon’s service being a seven day ground delivery option (UPS and FedEx both offer shorter delivery times), the point is that they are competing against two of their supply chain partners. Eventually as Amazon gains traction, we expect that their seven day delivery option will be reduced to a shorter delivery time option. While both FedEx and UPS view Amazon as a good customer, behind the scenes the two companies are working on strategies to keep up and/or compete against Amazon. Recent developments include FedEx’s introduction of Extra Hours. According to the press release, the service helps retailers to fulfill e-commerce orders into the evening and receive late pickups by FedEx Express, with next-day local delivery and two-day shipping to any address in the continental United States. Retailers can extend evening order cutoff times by 5-8 hours, with some as late as midnight, depending on their current order fulfillment process. A FedEx spokesperson told Business Insider, “By providing later pickup times and utilizing next-day local delivery, retailers can fulfill and deliver online purchases to their shoppers faster than their competition.” As for UPS, remember Amazon Key? Well, UPS is offering a similar solution and recently it announced it is expanding its pilot with Latch to ten new cities. In 2017, UPS announced its pilot program with smart lock company Latch that would provide UPS entry to apartment buildings to deliver packages. The difference between Amazon’s offering versus that of UPS’ is that the UPS service allows delivery people to enter into common areas rather than individual apartments like Amazon’s service. The winner in all of this will be the customer in terms of delivery service options, transparency in shipping costs and reduced shipping rates. Amazon ground delivery is finally here!

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  • Categories