Amazon expands air fleet but FedEx sees no threat and is unimpressed
ONLINE retail giant Amazon is becoming a player in the logistics and shipping industry, say analysts as its air cargo fleet grows to 50 planes serving new regional hubs, including a US$1
ONLINE retail giant Amazon is becoming a player in the logistics and shipping industry, say analysts as its air cargo fleet grows to 50 planes serving new regional hubs, including a US$1.5 billion base soon to open in northern Kentucky.
Despite analysts warnings, American courier giants like FedEx see no threat and remain unimpressed. 'We honestly don't see a world where Amazon would be a competitor to FedEx. There is no sensible way to compare them,' said FedEx vice president Patrick Fitzgerald.
But according to Wolfe Research, the e-commerce giant Amazon is now handling its own shipping for 26 per cent of online orders, reports CNBC TV news.
Said Morgan Stanley analyst Ravi Shanker: 'We think that Amazon will be a top logistics provider, whether it's in trucking or in air. The question is how quickly they will ramp up the operation.'
Said Northwestern University operations management lecturer Tarek Abdallah: 'By gaining more control over their supply chain, they can make sure to provide a better service. If a customer does not receive his package on time, they're not going to blame UPS or FedEx, they're going to blame Amazon.'
Said Ontario International Airport deputy director Atif Elkad: 'We have about eight flights a day on Amazon's Prime Air. I know when they started here a couple of years ago it was maybe three or four flights a day and it has steadily increased.'
But FedEx's Mr Fitzgerald said: 'In a given week, Amazon flies 671 flights. The FedEx number of flights per week is closer to 13,000.'