Amazon says it will ship more packages than UPS and FedEx by 2022 at the latest
Amazonexpects to deliver more packages than UPSor FedExin the US by early 2022 at the latest.
- Amazon has been building a
logisticsempire of fulfillment centers and cargo planes.
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Amazon is on track to deliver more packages than UPS and FedEx, according to a top Amazon executive.
"We expect we will be one of the largest carriers in the world by the end of this year," Dave Clark, the CEO of Amazon's worldwide consumer business, said Monday during an interview on CNBC's "Squawk Box." "I think we'll probably be the largest package delivery carrier in the US by the time we get to the end of the year, if not in early '22."
Amazon has been quietly amassing a logistics empire over the past decade, operating its own fleet of cargo planes, contracting with local delivery companies, and opening fulfillment centers across the US. The decision to move a large chunk of its parcel deliveries in-house was driven by rising
But Amazon's shipping ambitions have rankled its rivals, mainly FedEx. Amazon was one of FedEx's largest customers, with the carrier delivering about 200,000 Amazon boxes per day in 2018, according to estimates from Moody's Investors Service, until FedEx announced in 2019 that it would no longer fly packages for Amazon. Analysts estimated at the time that Amazon was one of FedEx's least profitable clients because it required high volumes of small, residential deliveries rather than more lucrative business contracts, Insider's Rachel Premack reported.
Plus, Amazon has steadily siphoned off FedEx's talent. Insider's Emma Cosgrove reported that hundreds of FedEx employees left for Amazon between 2012 and 2018, helping to buoy Amazon's burgeoning shipping operations.
In 2020, Amazon surpassed FedEx in terms of number of packages delivered — 4.2 billion compared to FedEx's 3.3 billion, according to Pitney Bowes data — and started to gain on UPS and the United States Postal Service: Amazon ships 21% of packages in the US, UPS ships 24%, and USPS ships 38%, the data showed.
Still, UPS and FedEx both have massive fleets of cargo planes that outpace Amazon's 75 aircraft, and UPS services business clients in a range of industries including healthcare and automotive manufacturing.
But Clark told CNBC that Amazon has been steadily "building the logistics infrastructure, the technology platform that drives it, for two decades now" to prepare it for today's challenging shipping landscape — and, presumably, to prepare Amazon to surpass its rivals.
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