Amazon Begins Shipping Cargo From Outside Customers
In an effort to compete with commercial shippers like FedEx and UPS, Amazon.com has started shipping non-Amazon packages, according to a new report by CNBC. The e-commerce giant spent 80 percent more in the first quarter on capital expenditures than the same time last year, mostly to grow its in-house logistics network, which includes a new $1.5 billion air hub in Kentucky that opened in August.
Now, Amazon is using some of its fleet of 40,000 semi-trucks, 30,00 vans and more than 70 planes to ship products from outside sellers, carrying non-Amazon cargo that would otherwise be shipped by the U.S. Postal Service, FedEx or UPS. However, this service isn't for everyone. The CNBC report said Amazon is cherry-picking the routes and cargo that work best with its logistics network.
Total Retail's Take: Like every other industry Amazon has taken on, the company appears to have a desire to dominate the shipping business. It's currently delivering 72 percent of its own packages, up more than 25 percent over two years ago. Analysts told CNBC that with the way Amazon's logistics network is growing, the company could eventually take over another commercial shipper.
And while Amazon's fleet is still smaller than UPS's or FedEx's, Amazon has built a name for itself on its fast and reliable delivery. Amazon's position in the shipping industry could be welcome news for retailers looking at the future of shipping delays with concern.