Amazon to launch delivery service to compete against FedEx and UPS

March 2, 2018

One of the world’s leading e-commerce industry is looking to diversify their services and are looking to enter the market of courier service. The main idea is to deliver products from business partners directly to the customers.

The company will perhaps face major competition from the already established companies such as FedEx and UPS. Both the companies are known to go towards any extent for delivering different kinds of products to the customer. The latest service will be regarded as a third party delivery service and will be known as Shipping with Amazon. The program will be initially launched in Los Angeles and will expand later on.

The competition

As stated earlier Amazon will be facing major challenges from two giants, UPS and FedEx. Both of the companies are there and have been leading for quite some time. Both the companies have been successful partners of Amazon but since they are looking to enter the field, the tale of the tape will be very interesting to see.

Background

Amazon has been always been interested in the field of logistics. To start this venture, the company has already built massive distribution centers where they acquire products such as food.

The company is looking to offer prime services and are looking to offer different perishable products in a span of two hours. One interesting fact that we have seen is that they are experimenting drone delivery. This makes it clear that they will be integrating massive technology to overcome the competition.

Challenges

Despite being successful partners, Amazon will definitely find it hard to face off against FedEx and UPS. Both of these companies are there and leading the market for over a decade. FedEx has created a trustworthy relationship with their customers and this might be one of the major reasons why people will opt for FedEx while looking for a good logistics company.

The networks built by both the companies are huge and Amazon surely requires a lot of time to match their networks. For this, they might need to invest heavily keeping in mind the heavy risk of failures. Both of the companies are still their successful partners and to maintain this relationship and investing a heavy amount of money for their venture can be a very tough job to do.

Conclusion

The idea initiated by the company seems to be good. The company has been heavily relying on their partners but since they are looking to start their own logistics company, things might become different in future.

Author


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