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As Amazon Air Expands, FedEx And UPS May Suffer

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Amazon aims to compete with FedEx and UPS in the logistics and shipping industry. That's what analysts told CNBC after Amazon Air recently expanded to 50 planes and announced it will open a $1.5 billion air hub in Northern Kentucky in 2021. Amazon is handling up to 26% of its own shipping, meaning FedEx, UPS and the U.S. Postal Service are losing a portion of Amazon's business. FedEx says it's not worried, but Morgan Stanley reports the major shippers have already lost 2% revenue to Amazon Air. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Amazon #AmazonAir As Amazon Air Expands, FedEx And UPS May Suffer
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Text Comments (3452)
CNBC (7 months ago)
Which industry do you think Amazon will disrupt next?
Volts_Krafty (1 month ago)
They gotta try pharmaceutical
Nicolas Ganea (1 month ago)
@davidkosa too much of a liability each state has different rules for food code
Aadarsh Kumar (1 month ago)
@R M Amazon already launched it's cloud service AWS
R M (1 month ago)
Cloud Services
AMT ENT (1 month ago)
Aadarsh Kumar oh okay I get what you’re saying
anthony lopez (32 minutes ago)
Your so wrong fedex amazon will dominate the whole industry to take full control of everything give it 5 more years
Clayton Keever (2 days ago)
Amazon is moving too fast, their workers wont last.
Fufner Keywheel (5 days ago)
Do not buy into the Prime deception. 2 day delivery will never come in 2 days. That's how they get your Prime money for shipping late and never on time especially in Canada.
NeonMusic (6 days ago)
Amazon has R2D2 delivering its packages. How do you compete with that? You can't. The force is strong with Amazon. :P
Aeron Metz (6 days ago)
Sadly Amazon Monopoly is unstoppable like many companies in USA
Who Isreal (6 days ago)
Lying ass Trump. "The tax payers are paying for that"... Why this mfka lie so much?
Teresa Holmes (6 days ago)
Amazon is a industrial beast
Wan Wall (7 days ago)
It's bound to happen. Just like the video about Costco chicken farm the main concept in here is the same which is vertical integration. Seems like it has went back full circle from full supply chain to outsourcing back to full supply chain. Wonders of technology
William R (9 days ago)
Good, I’m glad to hear that Amazon is taking business away from FedEx and UPS
Musixmash (5 days ago)
When FedEx files for bankcruptcy, remind me to go back here. I'll make a meme about that CEO.
birry cells (9 days ago)
08:01 how about that check....
Plane Spotting Aviation (10 days ago)
Interesting to see building knocked on on my local airport in place for Amazon 767s
googlesucks you (11 days ago)
I wouldnt mind Amazon if they didnt send everything in plastic then in a box. If he gets rid of the merchandising plastic it might be wirth it all. Box stores have to have plastic merch. But he really doesnt if he tells them not to use it.
googlesucks you (11 days ago)
In other words whats it matter when climate kills us all.
Eien Rozen (13 days ago)
UPS and Fedex not worried about amazon? Thinking they're too big or too far ahead... Wal-mart thought that too.
Reggie Turner (16 days ago)
If they stop and look for second, Amazon have a weakness!
LordJorgemort (18 days ago)
F*-** USPS, their service sucks.
Sonido Acuario (18 days ago)
How will they suffer ? Amazon only ships things that are bought through amazon . Fed ex and ups deliver everything else . ( expect mail ) and better yet fed ex and ups even deliver amazon boxes too 😂😂
Kenneth Esau Point (18 days ago)
AMAZON HAS 40PLANES,BUT WILL BUY MORE,AND AMAZON WILL NOT USE FEDX ONCE THEY REALLY START.
Inferno (20 days ago)
Amazon will end up buying fedex 🤣
Ember McLain (21 days ago)
FedEx better watch out. Blockbuster said said around the same thing about Netflix and look at where blockbuster is now
The Gamer Gamer (22 days ago)
And after they say that we need to limit everything to save the environment They could just put the packages on FedEx and ups and on airlines
LIRR G5 Steam Locomotive Productions (22 days ago)
Amazon you’re silly, use trains! They carry more!
Ed Hughes (23 days ago)
Amazon's utilization is only 7 hrs/day, and is not cost effective so it is a money loosing operation. Even FedEx fleet at 15 hrs/day is a brake even and FedEx owns their aircraft outright where Amazon is leasing their aircraft. Amazon you can not make any money diversifying into air shipping. Stick to car and driver ops
Dee Swint (23 days ago)
They will start buying cargo ships.
PHGamer (24 days ago)
calling it now. when amazon really grows their logistics empire they will absorb one of them ups or fedex (probably ups)
Mike LeDoux (26 days ago)
Amazon has its own delivery force called Amazon Flex. It hires individuals with an app based system just like uber. The people sign up for blocks of deliveries, pick them up at the amazon flex warehouse and deliver just like a postman, fedex or ups. They just use their car or personal truck with a bedcover. If it's not in your area yet, its coming.
Mark Jackson (28 days ago)
We should build a wall for Amazon
Balerio Torres (28 days ago)
Well ups and FedEx tend to not deliver the packages at front door. Their delivery drivers will mark that they came to your door when they really don't, making people to pick up the packages from their businesses. Prime customers always get the stuff delivered, so far everything I buy in Amazon gets to my door.
Roni Roni (1 month ago)
8:03-8:17 trump is just straight up wrong and CNBC just says it outright
Buff Barnaby (1 month ago)
Amazon pilot...Alexa , how do I land plane !?😂
Buff Barnaby (1 month ago)
I won't buy any Amazon Basics or use Alexa/Eco I don't use FB either 👍
B (1 month ago)
yes,but how many plane crashes with deaths do those other companies have verses Amazon.
Ken Checkeye (1 month ago)
Regarding the USPS costs - the price to ship a package as an individual has become so expensive that it’s not practical to mail something unless absolutely necessary.
Song (1 month ago)
7:05 be careful what you said in there. Imagine if Amazon going into shipping for other business.
iekoom (1 month ago)
0:33; 1:37: Dude, come on! Life's not that bad! It looks like you just swallowed a gulp of sour milk!
King Oliver (1 month ago)
I'm not much an Amazon fan but I do have yo admit that their planes look real good!
SSJaye (1 month ago)
Wouldn't they lose money off trying to create and maintain all these transfer vehicles?
SimpleLivings (1 month ago)
Amazon will cave-in and fall due to political pressure in Washington. The public's sentiment will be so outrageous by the fact that Amazon is trying to create a virtual monopoly that at some point the company will suffer major losses.
Baseshocks (1 month ago)
Amazon pay's their drivers and workers minimum wage while UPS and FedEx eventually pay them middle class wages. Amazon makes profit out of the desperate, the staff at Amazon need to unionize. Can't do anything about the drivers but the warehouse staff etc...
Stephen Sullivan (1 month ago)
Man fake media even ruining this kind of news. Boo
Grzy L (1 month ago)
Amazon should be a private company by buying all their shares back.
Alex Taing (1 month ago)
Anyone have experience with working for Amazon Prime Air in the Seattle location? I've been offered a job opportunity and would like some feedback on the work environment. If you could message me, I'd really appreciate it!
Robert Crisantos (1 month ago)
Amazon drivers are more ghetto then the FedEx and ups drivers....they walk more lazier...but there still gonna be 💩 missing
AJ Fiore (1 month ago)
My girlfriend now works for ATS (amazon transportation services) at Amazon, which is basically a new sales team/division trying to basically undercut Fed ex & UPS & USPS. My gf thinks she’s good at sales bc all she has to do is sell someone a price slashed service. Any time you can offer the same or similar service for half the price it’s unfair. This is Amazon’s game though, price cutting while being non profitable. Mind you she was working in a division called Amazon Restaurants at first which just recently got shut down bc amazon couldn’t compete with doordash and Uber eats, just saying.
Alex Joslin (1 month ago)
Amazon is destroying the Amazon because of all the trees they use for the cardboard boxes.
Kane Elliott (1 month ago)
I find it hilarious that these bigger company's underestimate amazon and their potential to take over market share in any given sector
cyberathlete (1 month ago)
Why didn't you interview UPS? You know how many Amazon packages are delivered by FedEx to me? Maybe 3-4, do you know how many UPS delivers? 50+. Ask the guy who is delivering almost all of Amazon's packages how much their business will take a hit if Amazon does it's own deliveries.
out of the loop (1 month ago)
Everything I get on amazon I’m a little disappointed but yet I keep ordering things probably because it’s a known company so feels more safer to order on line and lots of small business depends on amazon having their products on amazon website
Walter Diaz (1 month ago)
Subsidized by Amazon Web Services .... who can compete with that?
James Neally (1 month ago)
in what world does the USPS not receive federal funding?
Jeanpierre Bustamante (1 month ago)
Trump is jealous because bezos is richer than him
Waffle - (1 month ago)
No. He's mad because Amazon is ruining long term companies like usps, FedEx and ups.
Protector K9 (1 month ago)
This monopoly will at end hurt consumers. When there is no more competition Amazon will raise prices. Are you guys happy with your internet provider now imagine your choice for everything is like having single internet provider
Dawn Bringer (1 month ago)
the crazy part is I got a Sunday delivery from Amazon and I think this is how...
adamshiftyelso (1 month ago)
Remember when Amazon used to be name of a rainforest?
infinite cats (1 month ago)
What about dhl?
8788bb (1 month ago)
August 2019. I still get my Amazon packages from Arizona to New Mexico through UPS that uses the USPS last mile service. No Prime service here.
redmustang04 redmustang04 (2 months ago)
I delivered to Amazon in my truck and now they are going with their own trucking business. They are already started making their own trailers, but they will do anything and everything to cut down on costs.
Andria Marie (2 months ago)
Amazon is doing a public service by ditching fedex. Fedex sucks. They need put out of business.
Dee Swint (2 months ago)
What's next?? Amazon Cargo Ships. Control the market of the transit of goods from China/SE Asia to end market in USA, Europe, Canada, etc. Another way to save hundreds of billions.
Asmare Desta (2 months ago)
Im a truck driver amazon pay is the worst. FedEx and usps pay good ups is okay pay. Amazon sucks!!
Courtney Bowen (2 months ago)
well this video came out in feb2019... in june 2019 fedex annoounces that it lost USD2 000 000 000 for the quarter.. hmmmmm ... wonder if this switch by the number one shipper of it business in house had anything to do with this massive loss... its a staggering figure... divide that number by 90 days and we see how severe the effect is on their bottom line... in 90 days they may announce that they have lost another USD3 000 000 000 for that ninety days... interesting time ahead...
Javier Hernandez (2 months ago)
what is the cost after planes and all these things fuel maintenance payroll who are you kidding?
Justin Chiang (2 months ago)
The quote at 3:05 was edited to be misleading. The guy was saying Amazon was the largest private employer in the Inland Empire (one relatively small area in Southern California). CNBC edited his quote to make it seem like Amazon is the largest employer period.
Lala (2 months ago)
Honestly I'm not sure how much of a threat robot delivery is for the time being. If one of them comes to my apartment, it would just get stolen by my neighbors.
Aimee Thomson (2 months ago)
Keep their food hall profitable??
Erik B (2 months ago)
Amazon is less than 1% of fedex business.
l Phoenix l (2 months ago)
Good they worked hard for it.
Aaron (2 months ago)
Why is Trumps opinion even important, the purpose of the US post office is to deliver mail, not make money.
Brian Smith (2 months ago)
Isn't this considered monopolizing? I guess if you have enough money you can do what ever you want. This is why I stopped buying from Amazon. They treat their employees like crap and they are a monopoly.
Lady Phoenix (2 months ago)
More appreciation for the box on my front door 👌
E A (2 months ago)
Amazon takes forever shipping to Africa lol
Buzz Word (2 months ago)
UPS treats their employees like used machinery.. I had a tour of their package-handling facilities a few years ago. So excuse me if I don't shed a tear for them.
Province Life in Philippines (2 months ago)
atlas air cargo owns and operates those 767's.
you wish you knew (2 months ago)
The year 2030... Post office, what's that?
you wish you knew (2 months ago)
Sorry FedEx, give it time and Amazon will overtake you, mark my words!!!
Captain Grizzly (2 months ago)
saw an amazon driver the other day driving the wrong way on a 1 way road in this rich neighborhood. i stopped and told her she was on the wrong side and she said i know , but "it" told me to go here first. watch out.
Zayan Khan (2 months ago)
What if Amazon expands where they provide logistics for companies beyond their scope?
Algorhythm (2 months ago)
a very below cost, hahaha
Jay Lamont (2 months ago)
He is going to eat his words at 6:20 in 10 years time
Brand Nicolas (2 months ago)
Post office is not Gov funded- Trump..."Amazon is hurting USPS"..So what!!! The post office mostly delivers Junk Mail and Paper bills- no one wants either- surprise! I dont care if the USPS gets dumped completely. Most of the offices Minus a few decent ones- Have rude employees, steal or "lose" packages- dont deliver the day they say they will, the carriers even have broken my mailbox - maybe because they where having a "bad" day not to mention the packages left in the rain, no doorbell ring, mail getting delivered to my neighbors. and we have had the same mail guy for 10 years... Im the type that would leave a gift for the postman, a tip on holidays and always say hello. because I appreciate a honest living. But I wont be guilted into feeling bad for any company that has continued to fail its customers and not put forth the tech and processes to make the changes necessary to deliver a product or service they can be proud of. The nerve of Trump of all people! Like he ever gives a handout or "feels sorry" for anyone other than himself and his own interest- for him to turn his nose at Amazon/ Bezos- Hes probably just Jealous that Bezos is more wealthy than he will ever be and with that hes actually more powerful than Trump. Trumps you cant lift your foot up high enough to step on someone bigger than you, so you just try to kick at their ankles. Shame
chris thapelo (2 months ago)
Do they ship to Africa.?.
Vishnubharathi T (2 months ago)
Companies should be taxed also for how much CO2 they are putting into atmosphere
Novaximus (2 months ago)
Last week during Amazon's "Amazon Day" summer thingy sale my route at the post office had 3 hampers full of Amazon's packages. Not only can't Amazon still handle last mile delivery for the volume of sales they get but the drivers they "contract" are notoriously horrible and unsafe. For some reason they'll still drop off the big packages at the post office while giving their drivers small packages that would fit in a mailbox (which they're not allowed access to do) What they SHOULD be doing is giving the post office their small mailboxed size parcels and have their own drivers handle the big stuff since they have to walk to the door anyways. Never the less even if amazon handles all of their packages some day there's still PLENTY of business for UPS, USPS and FedEx to go around. Not a day goes by where I don't get 70 packages of pills....DSW shoes....stitchandfix….QVC....Target.....Walmart....BAGS UPON BAGS of cloths from all the main retailors....monthly Keurigg K cup refills....."Rue La La"....Ulta boxes... the list goes oooooooooon. Amazon isn't the end all be all of net shopping folks. They were just the foot the held the door open for everyone else to get on the net. Now that consumers are addicted to online shopping and comfortable with the process they're buying from all sorts of websites. Like Etsy to just name another. So Go Ahead Amazon. Please..... handle your own last mile delivery on all your stuff. We're over burdened as it is at the post office. We still have that thing called mail to handle. Business's love to spam their ads. Circulars are quite time consuming.
gugui mke (2 months ago)
You make no sense........ learn to write you jackhole.
DOUBLEDEFENSE (2 months ago)
wait till those drones pick up your package FED EX you will crying and craping your pants at the same time. You will never see one of those sidewalk robots in the ghetto....
rodolphe cahen (2 months ago)
around 6:00, you have the perfect bling ass manager who's one day will be proven soooo wrong !!!
HolyLens (2 months ago)
Amazon is eating everyone in business!
Иммиграция В Канаду (2 months ago)
Never use UPS. We all should ignore this company. UPS company is mocking me. I'm ready to start a trial on this company or something like that. I got a message from UPS about delivery on Jul10. And I didn't get it. Also, they didn't collect my phone number which the sender with 1 day delay. On July 15th their website suggested me that the delivery would be on July 16th and the website made me wait the whole evening and I got no delivery. At 6:20 pm I didn't meet anybody and I called the UPS help center. Their representative said that there's no delivery for this day. It's a mistake on UPS system and I should wait for the package by the end of July 17th. So I left the apartment. I came home and I got a note that it was delivered but nobody was at home. So after 7 days of the delivery day, 5 phones calls, 5 emails I still had no delivery. They left the sticker which suggested to pickup the package at their location point. The the next day when I waited to visit their location suddenly their website said that it's out for delivery and I had to sit at home from 4 to 8pm the third time during this week. I was waiting the whole evening. I saw a UPS truck leaving. I ran after it with no success and I found another sticker on the porch. So the delivery guy simply didn't want to go in the building which the first delivery guy did on the previous day. Nobody called me while every time I call their customer service they collect my phone number. I called UPS phone service again and I was said it will be on July 18. They made a request to bring my package to their location. Today it's July 18th. I called their customer service and I was said that the previous request was made incorrectly again and I will not have my package delivered today to their location. I paid for this item 3750 CAD and around 500 taxes which UPS collected. I think they lost my package and they hide this fact or they opened the package and they use it or something like that. Even if it's not I still feel like it's mockery. I've been mocked by UPS for 8 days in a row. Plus it'm afraid they may steal my 3750 CAD for item and 500 CAD in taxes.
Xao yaj (2 months ago)
I shop Amazon for most of all my stuff and I also contract with amazon on the side for delivery services = win win! screw fedex, usps, and ups.. it’ll only get bigger and better. Nothing last forever
Fernando Bonanno (2 months ago)
I said before CEO and management of companies are the down fall not the employees !! Hey moron at FedEx how long did it take you and UPS to get to the level that you are today , Amazon is just starting , just pure arrogance !!!! Hey FedEx in a few years you will be eating those words !!!!!!!!!
Dregs (2 months ago)
oh yes, buy and use the services of ONE CORPORATION. nothing could evvverrr go wrong there.....
Alpha QuickShip (2 months ago)
Doesn't this smell like monopoly? Wait...new headquarters in D.C., problem solved!
BigCooter.com (3 months ago)
Amazon at IPO, was "just an online book retailer" .... hard to believe what has happened since!!!
Dee Swint (3 months ago)
The Postal Service is losing over $2.5 Billion annually ($4 Billion in 2018), meaning JonQ Taxpayers subsidizes its continual existence. The DECREASES revenue/business from Amazon will really hurt them even more! The USPS never recovered after Fed and UPS entered the market and then digital mail (emails) replaced snail mail and postage! Let's be clear, Amazon is not trying to be a carrier, they just want to CONTROL shipping cost to end customers to INCREASE THEIR MARGINS vs paying Fedex and USPS that cost to ship to their end customers. Walmart was probably meddling with FedEx and USPS shipping rates to Amazon thus Amazon took drastic actions to create it's own carrier service to it's end customers.
Jeremy Boby (3 months ago)
Cars are next
Jeffrey D (3 months ago)
Complicated. If I were Jeff, Id still be selling a few hundred books a day out of my garage and just calling UPS everyday......but then again, Im no furnace of ambition...
Venture Electronics (3 months ago)
Those sidewalk robots will give the thieves a new challenge.
MV Master (3 months ago)
if only sears wasn't stupid. then we could have phyiscal amazon stores
Badtz Mu (3 months ago)
ANDREW YANG IS RIGHT! ANDREW YANG 2O20
Michael Horn (3 months ago)
Why are so many people calling Amazon a monopoly? Does Amazon offer anything you can't get somewhere else? Just because they do it cheaper or faster than their competition doesn't make them a monopoly. Shop around. You're perfectly welcome to spend more or wait longer for the same products elsewhere. I recently needed a simple fuel line fitting for my car. Did my local Autozone or Oreilley's even carry it? NO! But you know who did? Amazon. If so-called specialty stores can't step up their game enough to compete with a broad-market general retailer like Amazon, then I guess they DESERVE to lose some business to them. Companies need to WAKE THE HELL UP! Looking at YOU, FedEx.
Michael Horn (3 months ago)
"We honestly don't see a world where Amazon would be a competitor to FedEx..." Just wait, Buddy. That's just what Borders, Barnes & Noble, and Sears all thought, too. Better step up your game NOW, before it's too late.