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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 (3200)
CNBC (1 month ago)
Which industry do you think Amazon will disrupt next?
Robert Brown (6 days ago)
+S S My thoughts exactly.
EWA Ecommerce Website Agency (9 days ago)
They did with Pill pack
Homie Gibiotch (9 days ago)
+Jason Amazon just made a 200 million dollar deal with Freightliner/Mercedes for a fleet of delivery trucks.
Renee Robin smith (10 days ago)
+Boris The Teeth Guy UTTP AVGCP THDTC Returns definitely both
Charles de Gaulle (11 days ago)
FakeNews. Newspaper.
Joseph LaCerra (6 hours ago)
I have had my Amazon packages delivered by every one of the delivery services mentioned in this video. The only service that failed to complete deliveries to me is AMAZON! They failed to find my house, failed to follow directions for re-delivery, and caused me in several cases to file to return the item without ever having received it. I now receive my Amazon packages at a local 7-Eleven which has an Amazon lock box outside. My house is on a regular, well-marked, well-lit city street.
KenNovaMC (7 hours ago)
Don’t let that 15$ an hour deceive you, those who actually work on “amazon” planes are not amazon employees. Most of the employees are not employed by amazon, so they don’t get the 15$ an hour pay.
David Grishko (1 day ago)
I've seen a prime semi yesterday, didn't know they exist
Spencer Lupul (1 day ago)
remember when the CEO of blockbuster said that netflix was nothing, no threat at all? hm......
HI LEE (1 day ago)
I'm worried about the very threatening expansion on the logistics parts of Amazon.
Joseph LaCerra (5 hours ago)
I wonder at what point Amazon becomes a trust.
MelonHead1848 (2 days ago)
It is not about Amazon competing against anyone. It is about Amazon getting in where they fit in and now they will be one of the biggest companies on the planet
Commentator541 (4 days ago)
The truth is Amazon uses subcontractors that hire illegals for subpar wages to deliver goods in The US and this is how they keep their shipping cost low.
Rodney Johnston (4 days ago)
USPS Should be thankful for what they get from Amazon If United state postal service going to cry Amazon need to find some way out could deliver their mouth and I support Amazon Amazon U rock👍👍🇱🇷
Rodney Johnston (4 days ago)
I would rather shop at Amazon And never shop at a store because Store never have what I want And I hope that Amazon Would start delivering cause I know that we would get better service Amazon rocks👍👍👍
Michael Akowuah (4 days ago)
Good example of vertical integration.worked well for Rockefeller in early 1900's
Steve Rudder (6 days ago)
History is being made right before our eyes, and in our lifetime. As a carrier for Amazon, it amazes me how I can carry a 180lb box in the 53' trailer, 50 miles across town, and then 50 miles back with an empty trailer, and they still make money! One of the things that makes this country GREAT!
Robert Brown (6 days ago)
I hate to say this, but Trump has it right. Why should Amazon pay less to ship a package than I do. I recently sent a 1 pound 3 oz. package from Philadelphia to Chicago at a cost of $28.00. I have a previous box from Amazon where I bought a few car care products that weighed 1 pound 14 oz. and came from Nashville. The postage cost was $6.50. WHY??
scoop dee dee poop (7 days ago)
2:19 lmao shipments coming from Ontario airport come from KONT. ONT5 is the Amazon facility in San Bernardino.
Mohammed Alsaeed (8 days ago)
6:05 I don't agree with him.
Doc Doom (8 days ago)
When do monopoly laws kick in ?? It seems to me that amazon is getting too big to be lagal ...
Andres Morando (8 days ago)
Amazon take over. Monopoly from A-Z.
TimeHopeFaith (8 days ago)
Isn't this a definition of a monopoly? You control all aspects A-Z...
Bid Jason (9 days ago)
Postal service gives discount to amazon but when amazon transport is bigger he won't give discount to small/medium business never .
Bid Jason (9 days ago)
Once iPhone, Microsoft had monopoly now its amazon time
FlammenXCI (9 days ago)
To make up the difference, all FedEx has to do is accept more contracts from different online stores ran by retail companies like Walmart, Wayfair and Chewy. Companies that already mostly ship through them.
tommytomtime (9 days ago)
The USPS does not take a dime in tax payer money, and makes a profit every year. Your report is misleading the viewers. Do better research. Start with the con game congress has imposed on the USPS to pre pay future benefits .Something no other goverment agency or private business must do.This fools the public into thinking the USPO is going broke.
chichichi998 (9 days ago)
.... And you'd forget, they were an online bookstore!
TOP-A (9 days ago)
Didn't know Amazon is a logistics provider in Fu*k1ng? My goodness what does Amazon had in store next.
Galenda Wagen (9 days ago)
What with all these muzzies thanking about stuff?
Jason (9 days ago)
As long as my orders are shipped free or at a much cheaper price, I’m all for Amazon shipping my orders minus the carriers, UPS and FEDEX are expensive, USPS likes to lose and deliver my orders to wrong addresses and they won’t deliver my orders to a secondary address between the Thanksgiving and Christmas holidays.
Salman Chawla Saleem (10 days ago)
And yet fedex still delivers slower than amazon
Lord Colin (10 days ago)
I wish there was a law that prohibited a massive corporation from expanding into several different commerce sectors, crushing and eliminating competition, and screwing consumers with anti-competitive business practices.
Damien Dacote (10 days ago)
AMAZON isn't a shopping company! It's a SHIPPING company! 😉
kris brown (11 days ago)
Amazon needs to be restricted.
이은굥 (11 days ago)
진짜 미국에서 애머존만 썼었징 모든걸 다 애머존에서 주문 애머존 서비스는 따라올수가 없다 그리고 무조건 환불 다해주고
clay74able (11 days ago)
Walmart they charge a ton for shipping and amazon does not so
Scholarly Reader (11 days ago)
I suspect in 5 years UPS or. FED Ex will be gone for good.
Fabrice Izzo (11 days ago)
The FedEx VP attitude is how large corporations fail and go bankrupt. Unless he playing it cool for the camera.
Tom Tom (11 days ago)
Good, fedex and UPS need competition
MrMikemontei (11 days ago)
If the  Postal Service receives no tax dollars for operating expenses.. why does trump says tax payers are pay for it????
Rachel RollTide (11 days ago)
People are going to destroy those robots.
Luther Stokino (11 days ago)
Why is the 2% an issue? That’s such a small percentage.
DJ Noel Nice (12 days ago)
Yea we'll have 3 choices to choose from in the future. How exciting 🙄
John smith (12 days ago)
Looks like USPS, UPS, FedEx are complacent. When big companies get complacent they always fail in the long run. Wow.
kim jong-un (12 days ago)
Anytime a major company gets involved in transportation is bad news.
fxc2 (13 days ago)
Tech companies will continue to eat all types of commerce throughout the century. Tech conglomerates unprecedented in scale will soon rule the world. To what end?
Anonymous Gaming (13 days ago)
Im buying Amazon stock asap
BIll Geo (13 days ago)
15$/hour are for direct Amazon employees, temp workers get 7-9$/hour, and they are the majority working at the warehouses!
Pål Øynulvson (13 days ago)
two hour or instand delivery exists... it's called a shop.
francisco darko (13 days ago)
Fed ex sounded too cocky for my liking... it's in their best interest to partner or merge some of their services to Amazon. #ifucantbeatthemjointhem or perish !!
M Izza (13 days ago)
In Indonesia, instant delivery within 1-3 hours is the new norms here.
embrj145 (13 days ago)
Fedex and UPS was around long before Amazon, people think that if Amazon stops using them or if it dosent open shop in their City they're ruined, let Amazon carry their own crap. i usued to be adicted to Amazon, i would buy stuff i didnt need , or that it was even cheaper just around the corner, not anymore, i support local business as much as possible.
Loman Shark (15 days ago)
Climate change has stormed out!
nche-nji jude (17 days ago)
Thumbs up for Morgan Stanley
Rush Love (17 days ago)
Trump spouting more alternative facts 😒
tuj (18 days ago)
Got to admit they do deliveries better then anyone else especially usps who lose your package all the time and sometimes gives your package to your neighbor instead.
Alex Crypto (19 days ago)
MONOPOLISTIC BEHAVIOR!
Lauren Kattuah (20 days ago)
As Amazon should, they'd provide best serve to their own customers... UPS, Fed Ex and USPS are careless. I Love that blue Prime airplane and truck.
3m0_Wr3ck (21 days ago)
and now they know how usps and the like feel.
Victor Davalos (22 days ago)
What if one day years in the future Amazon will turn out in the world's "BNL" from the movie wall-e, Amazon will take control of everything, even governments and money, because people will be so depending from 1 company, sounds scary
Buchanan Games (23 days ago)
Amazon’s founder’s wife split with him because they were having money problems ..and now here he is; a global superpower in the palm of his hand .. he will never have to worry about anything in his life, ever
Mahes Valluvan (23 days ago)
So Amazon started ruling Air now. A to Z.
NoThrottle 2 (23 days ago)
When Amazon Air Expands? Was the air too hot?
Joshy Poshi (23 days ago)
Actually 49 planes now
prajin raj (24 days ago)
Flipkart in india started own courier e kart... Amazon does it in air... Simple
TITUS TITUS (24 days ago)
Except they are sub contractor Jets & cargo jets
Isaac Robo (25 days ago)
Hi
the dude Channel (25 days ago)
I can see an Amazon warehouse from my house
FlyingPigNJ (26 days ago)
UPS and Fedex will just go back to their pre-amazon value. I wouldn't call that suffering. It's amazon customers who will suffer. Amazon's delivery is a whole lot worse than fedex and UPS. They employ brain dead lazy drivers who will often leave your package at their most convenient location to rot, and sometimes cause damages to your house and/or vehicles. There is, of course, nothing we, as customers can do. There is only one amazon. As they grow their delivery arm, we suffer.
Steven Nix (23 days ago)
Damn
Lee Coleman (26 days ago)
XYZ .amen
tecknos africa (27 days ago)
Amazon selling chinese products now . don't be surprised to learn one day it has merged with Aliexpress or Japanese Rakuten
Oh yeah Yeah (27 days ago)
😂😂😂 Now they have 49
Pink Diamond (27 days ago)
All those planes in the air.Hope they fly safe. The sad tradity that happened last week. Amazon plane went down and People on board died. They need to check the plants for safe flight and not profit on money there all ready a millionaire company.
S. Mesut (27 days ago)
There is a psychiatric mental disorder called psychopathy ( look it up ) that afflicts some individuals. One of the symptoms of this illness is greed and the need for more when they have more. Also, such individuals display a lack of care for others including the loss of life.
flightisallright (1 month ago)
Actually 49 planes.
cmetube (1 month ago)
How they compete? Amazon causes airplanes to crash and people to die.
S. Mesut (1 month ago)
And they don't give a dam about you, me, or loss of life.
Rahul Dobhal (1 month ago)
6:20 this guy will regret saying this in 2 years :P
Sam Kim (1 month ago)
Amazon makes shopping so convenient. But it needs to do a better quality control of its last mile delivery. USPS delivers packages to my doorstep. But Amazon delivers sometimes to the just to the driveway in plain sight for package thieves.
John Smith (1 month ago)
FedEx isn't worried because FedEx understands the shipping industry. These specialists obviously don't. E-commerce makes up 12% of the total logistics market. Although Amazon makes up the majority of e-commerce (now), e-commerce is growing which is causing strong growth at FedEx and per FedEx's own admission only 1.3% total revenue comes from Amazon. FedEx is even moving itself in a position to be competing directly with Amazon by creating after hours shipping, and allowing small and medium sized businesses to use FedEx warehouses to store their product. The benefit is that these smaller companies get to use their own branding, not Amazon's, and they conduct their business out of the prying eyes of Amazon's marketplace, which otherwise gives Amazon direct information about what's selling allowing Amazon to compete directly with the companies using their infrastructure. Its a win for FedEx and a win for businesses other than Amazon. I find it laughable that at 1min46sec they say 3% of Amazon packages go FedEx (26% on Amazon), but at 7mins23sec they say Fedex ships 10% of Amazon's product. Which is it?
Red Bluesome (1 month ago)
Why is Amazon so popular, just because they’re a one-stop shop? It can’t be because they have the best prices, because they often don’t. And their website is a mess to navigate, right up there with eBay. People are robots for ordering everything off Amazon.
S. Mesut (1 month ago)
The younger generation is very easily brainwashed because the critical thinking process is no longer part of the equation. And yes; they have become robots. Amazon specifically targets this crowd because they know they can be easily conned. To these folks Amazon is more than just an online seller; its now become a CULT following.
leepakim (1 month ago)
I love Amazon and Google
S. Mesut (1 month ago)
And so do robots.
BROOKLYN MANIAC (1 month ago)
Amazon deserved its glory
S. Mesut (1 month ago)
Don't worry; they will get their glory but it won't be what they may expect it to be.
S. Mesut (1 month ago)
The Amazon trolls are out in full force on this and other sites. You can clearly pick them out in the crowd.
Archana Verma (1 month ago)
The plane crashed yesterday..
Bugsy Barboza (1 month ago)
So your saying amazon leases planes to fly customers packages, and it gets loaded on amazon's trailers that get pulled by a leased trucking service and gets delivered by another logistics company?........... If I was a billon dollar company id be trying to change that too.... 50 planes.... Ups has over 200 and fedex has over 600... Think they got a LONG way to go, but deff not possible.
Fred Carter (1 month ago)
The cheap way is not the way, you will see. These private third party air freighter conversions will continue to fall out of the sky and are bound to crash in cities.
Gohan (1 month ago)
Space Travel
Fox Meister (1 month ago)
One of their planes just crashed recently in Texas... =/
sherri moquin (1 month ago)
I can't believe that Amazon is trying to be better than FedEx and I even work at FedEx but if FedEx loses business then I might have to work at Amazon
Omega Net2161 (1 month ago)
"although the US Post office is not funded by US taxes dollars it is losing billions" And where does the lose money come from? The US tax payers. Good job CNBS this video was good right before they flat out lied!
iridium58 (1 month ago)
1 of their plane crash yesterday 30 miles of IAH Houston, RIP
Frank Field (1 month ago)
Over the last 10 years, UPS & FedEx have consistently raised their prices by around 5% per year. USPS has generally just followed suite. This in a time when fuel costs have probably been net negative. Keep jacking the rates and you invite entrants who will of course, initially, focus on cream skimming the densest and routes. Hello Amazon.
script child (1 month ago)
Everyone is overlooking what Amazon may attempt, instead of competeting with FedEx and UPS, Amazon will just buy them. It happens all the time.
Michael Pare (1 month ago)
Yes like what happened today to the 747, a shift in the center of gravity would definitely do that for sure that would explain the nose down impact it’s a higher rate of dissent.
457 BTV (1 month ago)
767
S. Mesut (1 month ago)
Michael Pare - We discussed this before. Yes the CG ( Center of Gravity ) is CRITICAL to the aerodynamics of ANY aircraft. A catastrophic forward shift of the cargo would cause a sudden pitch nose down and likewise a catastrophic aft shift of the cargo would cause a sudden pitch nose up. In this instance, it was a sudden pitch nose down from which the flight crew could not recover from. This also explains why nearby witnesses who said they heard a surge of the engines. Obviously the flight crew was struggling to bring the nose back up with elevator control and increase in power to the engines. It looks like they didn't have enough altitude to recover since they were on their final approach into Houston. Had they had more altitude, they may have been able to recover but the aircraft would still be in a less stable flying attitude. ALSO, to correct you ... the aircraft in question is a Boeing 767 ... not a Boeing 747 .
sLoUbRew (1 month ago)
49*
Disability City (1 month ago)
Amazon Prime crashed today near Texas
S. Mesut (1 month ago)
Amazing that you just found out considering all the tech toys out there. Better late than never.
S. Mesut (1 month ago)
From the comments here, it looks like people are enemies of the USPS and are accomplices to the deep state, Amazon, and the rest of the cabal. I wonder just how many Amazon trolls are making such comments against the USPS ? The USPS would of course be a prime target that Amazon would want to eliminate since the USPS controls the majority of the delivery addresses including foreign inbound shipments to the U.S. with U.S. Customs and Border Protection ( a division of the U.S. Department of Home Land Security ).
Julius Krabbe (1 month ago)
LAter a Plane Crashes in texas
Michael Pare (1 month ago)
not if their planes keep crashing.
S. Mesut (1 month ago)
+Michael Pare - Correct. Also bear in mind this. The aircraft was carrying cargo ( and heavy ). Any possible catastrophic shift in the cargo could have easily upset the the aircraft's CG ( center of gravity ). If so; this would also explain the aircraft's sudden nose pitch down attitude if the cargo shifted forward. Amazon, in its greedy hast to get packages moving, also needs to be taken into account. By-the-way; I have a pilot's license.
Michael Pare (1 month ago)
Considering the age of the aircraft and looking at the flight path, it looks like structural failure.
S. Mesut (1 month ago)
+Michael Pare - Correct. From the looks of it, this Boeing 767 was EXTENSIVELY used on the day of the crash. The aircraft possibly went over its daily limit hours of use, flight crew hours, and scheduled maintenance. On the day of the incident, this particular aircraft went from Chicago to Ontario, California ( southern California ), then to Hawaii, then back to Ontario, then to Miami, and then finally from Miami to Houston.
Michael Pare (1 month ago)
First it must be determined if they violated any federal aviation regulations.
S. Mesut (1 month ago)
The FAA ( Federal Aviation Administration ) has every right to ground Amazon or anyone else as they see fit.
Listeed (1 month ago)
Yeah, they've already took a massive hit with their airline. One of their 767F cargo planes crashed.
Patrick Ptomey (1 month ago)
Yikes! I was watching this yesterday as the Amazon Air cargo plane crashed outside Houston!
BoulevardFan28 (1 month ago)
A Prime Air flight operated by Atlas Air crashed in Houston on 2/23/19. All aboard were killed.
Joshua Fontanez (1 month ago)
People make it seem bigger than it is, they’re trying to deliver their own packages 📦, not everyone buys from amazon, as more big names companies are transitioning to e-commerce like Walmart, Target, Lowes, Sam’s, Cotsco, and other ones like wayfair, wish, they still need a carrier you know 🤷🏻‍♂️
Tara Aliyeva (1 month ago)
Trump was complaining AMAZON was taking advantage of POSTAL office, UPS and FED EX now they EXPAND.
Rodrigo Bari (1 month ago)
CNBC lying, as usual.