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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 (3493)
CNBC (9 months ago)
Which industry do you think Amazon will disrupt next?
Lil Gay (9 days ago)
Jason Babila The Government can literally drop Amazon if they wanted to, since they are probably gonna start a monopoly, or build up a huge one.
Ed Porter (26 days ago)
News.
Jayyy_ _Frann (30 days ago)
eh idk disrupt me with me finding everything there and losing my money
H M (1 month ago)
I don't know but 1 hour delivery would make me not shop local.
Volts_Krafty (2 months ago)
They gotta try pharmaceutical
alex 2020 (2 days ago)
Well I just got a job at UPS 25/30% seems like a major chunk
Sunny Wu (3 days ago)
I hear to get priority landing clearances and fast turnaround time all PrimeAir planes will SQUAWK 7700.
WaroftanksPro (3 days ago)
"very below cost"
Polaris Ice (3 days ago)
It’s Fort Worth not Forth Worth
Jeff Bardot (4 days ago)
Those sidewalk robots will never work here in the USA. Bunch of thieves and criminals reside here. I see those robots working in countries like Japan and South Korea where stealing and vandalism rarely happens.
Be.you.tifully Made (5 days ago)
Amazon is going to put literally everybody out of business. I better try to get a job there when I graduate.
Chris P. Bacon (5 days ago)
Fed-Ex ....exec thinks Amazon isn't a shipping threat? He's an idiot. Bye bye Fed-Ex idiot.
Stringbean (6 days ago)
Fed-Ex guy making out that Amazon Air is no threat to them. Yeah right, maybe not in the short term but Amazon is a monster that keeps growing and expanding.
Rexy (7 days ago)
“Ontario international in Southern California” B r u h
K2PAK (7 days ago)
That’s what blockbuster said about Netflix. Just saying
Zama Dlamini (12 days ago)
Amazon needs to be stopped, they are putting local businesses out of business, people are becoming jobless, are creating a monopoly which will end up hurting consumers in the end and they DON'T PAY TAXES, they have to be stopped before they get rid of USPS!
BuffyTV (13 days ago)
8:33 yeet
Theo Fu (14 days ago)
Amazon is growing
Mark Svenningsen (15 days ago)
Unfortunately nobody has noticed that Amazon is delivering Amazon packages....they will NOT make a serious profit since they are servicing their own products not outside companies.
30jersey478 (21 days ago)
It wouldn't shock me to see Amazon acquire some of the first hybrid planes in the future. They can go green, cut expenses and still get orders to customers fast. The same with semi-trucks also. If they do it, I said it first.
150 Abonennten ohne Video Challenge! (23 days ago)
It’s crazy how crazy Amazon grows! Well Twitch will die, if all Streamers move, but Amazon will go on
NASCARBOB57 (24 days ago)
Amazon's shipping stinks. Still waiting for a order from two weeks ago. This is not the first time. Never had a problem with UPS.
Ben Esser (25 days ago)
where is the post office getting its founding from then . its getting money from the taxpayers where that is direct or indirect is the appropriate question
Notorious Nora (27 days ago)
FedEx and UPS are terrible companies, good riddance. Evolve or die
joe vision (29 days ago)
wrong the post office is bailed out by the federal goverment and the post office borrows money thru t bills you are a bimbp
GOODFOX004200 (29 days ago)
UPS and FedEx is old time for a new generation to take over
nicholas aasmundstad (29 days ago)
When you realize a monopoly is wanting to get not only houses but now they’re after hotels🤣
Jayyy_ _Frann (30 days ago)
ebay is something that saves fedex and all that stufg as well
Moe Money (30 days ago)
Let the company grow! Amazing how a book salesperson is building this one of a kind global hedgemenont of a company! Please dont scream monopoly and divide the company I'm many parts, that is not the American dream but is American Killing.
Planet Jigobot TV (30 days ago)
Yang is trying to tell y'all I just hope we're listening. Yang2020
H M (1 month ago)
Amazon will be unbeatable if they deliver within 1 hour.
Matthew Martinez (1 month ago)
Yeah but the us postal which is the government cant be taken down; fedex and ups do international what does prime do domestic. And prime air is also owned and operated by atlas who is also providing the planes plus they are also operated by ATI and a few others so what are they tickling no one and fedex and ups still are orderinng planes
Francois Dupont (1 month ago)
"we arent worried about amazon" you know about the turtle and the hare?
F8_HYPER_NOVA (1 month ago)
I don’t care about competing. I only care about getting the things I ordered
James Bond (1 month ago)
I got fired from UPS☹, and I got hired at Amazon!😁 The Lord works in mysterious ways...Praise the Lord 🙏🙏🙏😁
Tom Stagliano (1 month ago)
Amazon hasn't even felt the pressure of holiday season. And now that it lost their contract with FedEx good luck
Tom Stagliano (1 month ago)
One thing to add to is Amazon works its employees to the bone and pilots as well. They are known for cooking books on pilot log flight hours wont be long before they are hit with the 50k fine per pilot
Craig Dyer (1 month ago)
Today Amazon has one day delivery. Something I heard about Amazon is that, say for example I go on Amazon.com and look at an item for sale today. Amazon will pre ship the item to the nearest fulfillment center, on the chance I might order that item in a few days. If I order it from Amazon a week later, it is already in the nearest center ready to ship to me. Amazing. I just ordered an item yesterday and it was delivered 30 minutes ago. When I clicked on my order status an hour ago, a map popped up stating the truck was 6 stops away. While looking at the map, the screen refreshed every 30 seconds. It updated the trucks location when it moved. When it said I was next, I walked out of my house and the truck was coming down my street. These are a few reasons that Amazon is as big with online sales as it has become.
Elias D (1 month ago)
Fed ex is like blockbuster right now when netflix emerged and ignored them
anthony lopez (1 month ago)
Your so wrong fedex amazon will dominate the whole industry to take full control of everything give it 5 more years
Clayton Keever (1 month ago)
Amazon is moving too fast, their workers wont last.
Fufner Keywheel (1 month 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 (1 month 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 (1 month ago)
Sadly Amazon Monopoly is unstoppable like many companies in USA
Who Isreal (1 month ago)
Lying ass Trump. "The tax payers are paying for that"... Why this mfka lie so much?
Teresa Holmes (1 month ago)
Amazon is a industrial beast
Wan Wall (1 month 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 (1 month ago)
Good, I’m glad to hear that Amazon is taking business away from FedEx and UPS
Musixmash (1 month ago)
When FedEx files for bankcruptcy, remind me to go back here. I'll make a meme about that CEO.
birry cells (1 month ago)
08:01 how about that check....
Plane Spotting Aviation (1 month ago)
Interesting to see building knocked on on my local airport in place for Amazon 767s
googlesucks you (1 month 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 (1 month ago)
In other words whats it matter when climate kills us all.
Eien Rozen (1 month ago)
UPS and Fedex not worried about amazon? Thinking they're too big or too far ahead... Wal-mart thought that too.
Reggie Turner (1 month ago)
If they stop and look for second, Amazon have a weakness!
LordJorgemort (1 month ago)
F*-** USPS, their service sucks.
Sonido Acuario (1 month 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 (1 month ago)
AMAZON HAS 40PLANES,BUT WILL BUY MORE,AND AMAZON WILL NOT USE FEDX ONCE THEY REALLY START.
Inferno (1 month ago)
Amazon will end up buying fedex 🤣
Ember McLain (1 month ago)
FedEx better watch out. Blockbuster said said around the same thing about Netflix and look at where blockbuster is now
The Gamer Gamer (2 months 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 (2 months ago)
Amazon you’re silly, use trains! They carry more!
Ed Hughes (2 months 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 (2 months ago)
They will start buying cargo ships.
PHGamer (2 months ago)
calling it now. when amazon really grows their logistics empire they will absorb one of them ups or fedex (probably ups)
Mike LeDoux (2 months 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 (2 months ago)
We should build a wall for Amazon
Balerio Torres (2 months 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 (2 months ago)
8:03-8:17 trump is just straight up wrong and CNBC just says it outright
Buff Barnaby (2 months ago)
Amazon pilot...Alexa , how do I land plane !?😂
Buff Barnaby (2 months ago)
I won't buy any Amazon Basics or use Alexa/Eco I don't use FB either 👍
B (2 months ago)
yes,but how many plane crashes with deaths do those other companies have verses Amazon.
Ken Checkeye (2 months 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 (2 months ago)
7:05 be careful what you said in there. Imagine if Amazon going into shipping for other business.
iekoom (2 months 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 (2 months ago)
I'm not much an Amazon fan but I do have yo admit that their planes look real good!
SSJaye (2 months ago)
Wouldn't they lose money off trying to create and maintain all these transfer vehicles?
SimpleLivings (2 months 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 (2 months 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 (2 months ago)
Man fake media even ruining this kind of news. Boo
Grzy L (2 months ago)
Amazon should be a private company by buying all their shares back.
Alex Taing (2 months 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 (2 months ago)
Amazon drivers are more ghetto then the FedEx and ups drivers....they walk more lazier...but there still gonna be 💩 missing
AJ Fiore (2 months 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 (2 months ago)
Amazon is destroying the Amazon because of all the trees they use for the cardboard boxes.
Kane Elliott (2 months 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 (2 months 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 (2 months 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 (2 months ago)
Subsidized by Amazon Web Services .... who can compete with that?
Makuhita Hariyama (3 months ago)
in what world does the USPS not receive federal funding?
Jeanpierre Bustamante (3 months ago)
Trump is jealous because bezos is richer than him
Waffle - (2 months ago)
No. He's mad because Amazon is ruining long term companies like usps, FedEx and ups.
Protector K9 (3 months 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 (3 months ago)
the crazy part is I got a Sunday delivery from Amazon and I think this is how...
adamshiftyelso (3 months ago)
Remember when Amazon used to be name of a rainforest?
SupraMk4Nerd 06 (3 months ago)
What about dhl?
8788bb (3 months 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 (3 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 (3 months ago)
Amazon is doing a public service by ditching fedex. Fedex sucks. They need put out of business.
Dee Swint (3 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 (3 months ago)
Im a truck driver amazon pay is the worst. FedEx and usps pay good ups is okay pay. Amazon sucks!!
Courtney Bowen (3 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 (3 months ago)
what is the cost after planes and all these things fuel maintenance payroll who are you kidding?
Justin Chiang (3 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 (3 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 (3 months ago)
Keep their food hall profitable??
Erik B (3 months ago)
Amazon is less than 1% of fedex business.
l Phoenix l (3 months ago)
Good they worked hard for it.