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FedEx, UPS and Royal Mail share prices take a hit after Shipping with Amazon news

By Dan Wilson February 11, 2018 - 11:01 pm

There has been significant reaction to the launch of Shipping with Amazon news. In case you missed it, you can read more here: Amazon prepare to launch SWA (Shipping with Amazon).

In a small test, currently operating in the Los Angeles area of the United States, Amazon will be taking on the full journey of deliveries for sellers. In effect, they will be operating their own postal service end to end. Although it’s a pilot scheme, it’s also an obvious opportunity that Amazon is well placed to take advantage from. Amazon’s focus on efficiency and logistics is well known and SWA makes sense.

News of the test sparked concern amongst investors that the world’s largest online retailer is keen to disrupt the shipping market. And FedEx and UPS shares were down more than 4% in afternoon trading on Friday. In the UK, Royal Mail wobbled and decreased 1%.

An Amazon spokesperson said of the shipping test: “We are always innovating and experimenting on behalf of customers and the businesses that sell and grow on Amazon to create faster lower-cost delivery choices.”

But how big is the challenge? Pundits have played down the short term prospects because the task is so huge to take on the bigger existing players. According to Reuters, Cowen and Co. analyst Helane Becker has estimated that Amazon would have to invest $100bn to build a global network of facilities, planes and trucks to compete with FedEx and UPS. Needless to say, Amazon already has some of that infrastructure in place already.

They have a fleet of ships, airports and fulfilment hubs as well as a their fulfilment facilities. So this new horizon is scarcely a surprise. Indeed, in the past Amazon founder and CEO Jeff Bezos has been critical of Royal Mail because it “did not have the capacity” to handle the volume of Amazon’s deliveries.

We’ll keep you posted.

  • Ross
    6 months ago

    Your posts would have significantly more credence if you bothered to check for spelling and grammar…

  • 6 months ago

    Interesting insight Ross…..grammer is always more important than the message. God help the poor fools who have dyslexia or other learning disabilities. GET REAL

    • Ross
      6 months ago

      Poor spelling and grammar make the writer look ill-informed and subconsciously add ‘doubt’ about the article being written.

      Simply passing the article through a spelling checker (which is standard on basically all browsers now by default) isn’t exactly hard, is it?

      Thanks for your helpful comment though – perhaps you don’t notice the spelling or grammar as you’re on the same intellectual level as the author. In that case, I apologise for highlighting the faults to you.

  • northumbrian
    6 months ago

    Cringe
    we want news and info we dont give a bugger about the grammar and spelling

    • Ross
      6 months ago

      Welcome to the world of today – where no one cares about standards. :/

      It’s the very basics. Manners, spelling, punctuation, etc. All the things lost in society today.

      I pity you.

    • northumbrian
      6 months ago

      yes please were in need of sympathy and understanding we dont know our semi colon from our arsehole

    • Ross
      6 months ago

      we’re*

  • 6 months ago

    The “wobble” in Royal Mail’s share price was a 1% drop in a week in which it rose 5% against the backdrop of significant falls in stock prices in all markets across the globe. It didn’t last long either the RM share price is up 1.24% already today.

  • 6 months ago

    @Ross – I copied the article into LibreOffice and it did not show any spelling errors. Nor did I think the article was badly written or hard to understand.

    Whilst condemning the writer, did you not have anything of worth to comment on regarding the article? Or are your thoughts limited the teaching of English?

    @ Steve & northumbrian – Personally I do feel that articles should be written with correct grammar and spelling.

    I think it is a little early for the RM share price to drop because of what Amazon may do in the long term. But at the speed in which Amazon is growing, year on year, I do think that SWA will be be a consideration for non FBA sellers within the next 10 years.

    World dominance by Amazon continues….

  • Andrew
    6 months ago

    Royal Mail easily coped with Amazon delivery’s that’s why they run back to Royal Mail all the time

    • TimNiceButDim
      6 months ago

      I think they go back to Royal Mail because general public have the perception that Royal Mail are crap. They can then point the blame at Royal Mail.

      The issue Royal Mail have is they are treating Amazon traffic with priority over their standard 24 traffic. This will eventually annoy their standard customers and will affect their metrics.

    • 6 months ago

      I would imagine that Amazon used RM when they can not cope or they do not cover a certain area.

      Do RM give priority to Amazon? It would not surprise me if they did, in any business you are likely to give such a large customer preferential treatment.

  • 6 months ago

    While on the subject of post, can anyone explain why Chinese sellers in China get such cheap postage in to the UK?? Cheers, Steve.

    • 6 months ago

      I was told many many years ago by a friend in telecoms that they had a reciprocal arrangements with other telecom’s companies known as a “penny up & penny down” for each connection, regardless of time.

      This could be the same type of reciprocal arrangement the post have between countries, I do not know.