Amazon.Com, Inc AMZN has surpassed United Parcel Service, Inc UPS and FedEx Corp FDX to become the largest delivery business in the U.S. in terms of parcel volumes.
In 2022, Amazon delivered more packages to U.S. homes than UPS, having already overtaken FedEx in 2020. Despite this, the U.S. Postal Service remains the largest parcel service by volume, handling millions of packages for all three companies, The Wall Street Journal reports.
A decade earlier, Amazon heavily relied on UPS and FedEx for deliveries. However, its rapid growth and strategic changes at UPS and FedEx have shifted the dynamics. By Thanksgiving, Amazon had delivered over 4.8 billion packages in the U.S. this year, with projections to reach around 5.9 billion by year's end. This is an increase from the 5.2 billion packages shipped last year.
Amazon's delivery figures only include packages it handles entirely, whereas UPS and FedEx count parcels handed off to the postal service for final delivery. UPS's domestic volume this year will likely be below last year's 5.3 billion, and FedEx's domestic volume was around 3.05 billion for the fiscal year ending May 31, 2023.
FedEx and UPS have shifted their focus from volume to delivering more profitable parcels. FedEx ended its partnership with Amazon in 2019, while Amazon still accounts for about 11% of UPS's revenue, WSJ reports.
Amazon attributes much of its delivery progress to its route franchise program. Despite this regional focus, the company plans to continue collaborating with other delivery partners and carriers to manage extra capacity.
While Amazon has outpaced both FedEx and UPS in residential delivery volumes, it hasn't matched their global reach or the breadth of their operations. Analyst Brian Ossenbeck from J.P. Morgan told the Journal that Amazon excels in one-way network deliveries with faster speeds but lacks the comprehensive pick-up and delivery coverage that FedEx and UPS offer.
Amazon has leveraged artificial intelligence to speed up deliveries by minimizing the distance between its products and customers.
Price Action: AMZN shares were up 1.1% to $148.45 at last check Monday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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