\n
Jim Cramer on Amazon Delivery: FedEx Is Not a Company That’s Easily Beaten<\/span><\/strong><\/p>\n<\/div>\n A<\/span>mid<\/strong> a report in The Wall Street Journal saying Amazon is set to start a delivery service that could compete with FedEx and UPS, TheStreet’s founder and Action Alerts PLUS Portfolio Manager Jim Cramer said FedEx is “not a company that’s easily beaten.”<\/p>\n A<\/span>fter sending shock waves through the grocery and health-care industries in recent weeks, Amazon dropped another bombshell Friday morning:\u00a0The online\u00a0giant plans to test a new delivery service for businesses beginning this fall, in the hope of speeding up the\u00a0fulfillment process for third-party items, according to a\u00a0person familiar with the matter.<\/p>\n The\u00a0reaction was swift: Shares of FedEx and UPS stock fell as much as 5 percent apiece, as\u00a0investors fretted that Amazon\u2019s new service could chip away at revenue\u00a0\u2014 and profits \u2014 for the country\u2019s largest delivery services.<\/p>\n \u201cIn a move that will send shivers down the spines of the traditional delivery companies, Amazon has finally decided to try its hand at fulfillment,\u201d Neil Saunders, managing director of research firm GlobalData Retail, wrote in a note to clients. \u201cThis leaves delivery firms with the unattractive prospect of losing share in their most lucrative and profitable markets.\u201d<\/p>\n But some analysts said the panic was premature.\u00a0Amazon, which began as an online bookseller two decades ago, has grown into a powerhouse\u00a0involved in a number of businesses, including cloud computing, drones and moviemaking. But the shipping and delivery business is a\u00a0costly and complex one, analysts said, and it could take Amazon decades \u2014 and tens of billions of dollars \u2014 to compete with the likes of FedEx and UPS.<\/p>\n And although Amazon has\u00a0upended a number of businesses in its 24 years, it has also had its share of missteps, including failed attempts to get into the auction and travel businesses. (Jeffrey P. Bezos, the founder and chief executive of Amazon, also owns The Washington Post.)<\/p>\n \u201cThere is no reason to assume FedEx and UPS are cooked just because Amazon is dipping its toes in the water,\u201d\u00a0said Anthony Chukumba, a senior research analyst at Loop Capital Markets in Chicago.<\/p>\n \u201cEverybody loves to talk about Amazon\u2019s successes, but nobody talks about its failures. How many people are rocking Fire Phones right now? Amazon is really good at a number of things, but it isn\u2019t infallible.\u201d<\/p>\n The pilot program,\u00a0set to begin later this year, would include a handful of sellers located in one Zip code in Los Angeles, according to the person familiar with the matter, who spoke on the condition of anonymity to discuss the so-far private plans.<\/p>\n The company may eventually expand to other markets and deliver items directly to consumers, that person said, but the person added that the program was still in the early planning stages.\u00a0The Wall Street Journal reported on the plans earlier.<\/p>\n \u201cWe\u2019re always innovating and experimenting on behalf of customers and the businesses that sell and grow on Amazon to create faster lower-cost delivery choices,\u201d a spokeswoman for Amazon said in an email.<\/p>\n It would take Amazon 30 years and $30 billion to replicate the networks that FedEx and UPS already have, Chukumba said. Although Amazon has been beefing up its delivery capabilities in recent years, with cargo planes,\u00a0trucks\u00a0and same-day delivery drivers, he said its operations are still much smaller than those of the nation\u2019s largest delivery companies.<\/p>\n \u201cAmazon leases 40 planes, FedEx has 659 \u2014 there is no comparison,\u201d Chukumba said. \u201cNobody has better technology than Amazon does, but you need more than that: You need planes and trucks and people and delivery hubs. Let\u2019s not assume that this will be an overnight success.\u201d<\/p>\n In a brief statement, a spokesman for FedEx said the idea that Amazon\u2019s new delivery service would vie with FedEx and UPS \u201cdemonstrates a lack of basic understanding of the full scale of the global transportation industry.\u201d UPS did not respond to requests for comment.<\/p>\n Chukumba pointed to another example of an international powerhouse that tried to conquer the U.S. delivery market: DHL, the German logistics company that has a large presence in Europe and Asia. The company spent\u00a0more than $600 million\u00a0trying to compete with UPS and FedEx in the early 2000s.\u00a0It built regional hubs throughout the country and hired thousands of workers.<\/p>\n \u201cBut the effort fell flat on its face,\u201d\u00a0Chukumba said. \u201cDHL\u00a0eventually exited the market with hundreds of millions of dollars in losses.\u201d<\/p>\n Others, though, were less skeptical of Amazon\u2019s efforts and said they were a natural next step for a company that has invested heavily in logistics technology and infrastructure.<\/p>\n For more Logistics News,\u00a0\u00a0\u00a0 <\/strong>Follow us on TWITTER <\/strong><\/a>\u00a0 \u00a0 \u00a0\u00a0<\/strong>Follow us on FACEBOOK<\/strong><\/a><\/p>\n \u201cThis is no surprise at all,\u201d said Frank Poore,\u00a0chief executive of CommerceHub,\u00a0a\u00a0tech company that helps retailers improve shipping and logistics. \u201cAmazon\u2019s packages are overwhelming the system \u2014 and if same-day delivery is Amazon\u2019s priority,\u00a0there isn\u2019t a national same-day delivery service they can just tap into. It makes sense to do this on their own.\u201d<\/p>\n With reports from Washington Post and\u00a0TheStreet<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Shares of UPS and FedEx fell as much as 5 percent Friday morning following news of Amazon\u2019s delivery pilot.\u00a0(Mark Lennihan\/AP) Jim Cramer on Amazon Delivery: FedEx Is Not a Company That’s Easily Beaten Amid a report in The Wall Street Journal saying Amazon is set to start a delivery service that could compete with FedEx…<\/p>\n","protected":false},"author":2,"featured_media":9840,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2,18,69,61,47],"tags":[],"_links":{"self":[{"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/posts\/9860"}],"collection":[{"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/comments?post=9860"}],"version-history":[{"count":4,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/posts\/9860\/revisions"}],"predecessor-version":[{"id":9874,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/posts\/9860\/revisions\/9874"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/media\/9840"}],"wp:attachment":[{"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/media?parent=9860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/categories?post=9860"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/moovafrica.com\/news\/wp-json\/wp\/v2\/tags?post=9860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n![\"\"](\"http:\/\/moovafrica.com\/news\/wp-content\/uploads\/2018\/01\/Sameday-Cargo-Delivery-1.jpg\")
<\/p>\n