FedEx and Amazon Rivals in the Same Eco-sphere

Christopher Zenios23/09/20192min
FedEx is now backtracking on previous statements acknowledging that Amazon is a competitor.

Fred Smith, CEO of FedEx who has denied amazon as a competitor on multiple occasions commented on the most recent earnings call that Amazon is now one of the five main players in the logistics scope, he stated:

 The last thing I’m going to say is we basically compete in an ecosphere that’s got five entities in it. There’s UPS, there’s DHL, there’s the U.S. Postal Service, and now increasingly, there’s Amazon. That’s who we wake up every day trying to think about how we compete against and give the best services to our sales force.

These comments embody a significant shift in FedEx stand with Amazon as they have long downplayed Amazons ever-growing presence in the logistics space.

One example is that of Rajesh Subramaniam, FedEx President, who recently stated in March that Amazon is “not a threat to our business” or “our future growth,”. The FedEx President also stated last September that Amazons step into the logistics space “should not be confused as competition with FedEx.”

However, a change in opinion has occurred as FedEx shares are down more than 13%. Alongside this FedEx has now ended its ground and express delivery service contracts with Amazon. With FedEx commenting the company missed on earnings and lowered its 2020 full-year guidance. One main aspect that contributed to this decision is the loss of a large customer – this is most likely Amazon.

Fred Smith gave reason to believe that Amazon as a competitor will only intensify as it extends into various sectors. One sector Amazon is venturing into is “transport and logistics services”. Amazon has launched the delivery service partners program and has also expanded its air fleet adding 50 planes thus eliminating the reliance on UPS and FedEx.

Christopher Zenios

Christopher has always been a pioneer, a first adopter when it comes to technological advancements. Over the years, his expertise surrounded the real estate and digital markets and their evolution in today's society. After being the editor to various professional business news portals and blogs, he was selected to become the chief editor for HWC. Contact Christopher at +357-22029786 ext: 6110 or by email at [email protected] for editorial related questions.

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