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Could Amazon’s new delivery service cut into the FedEx, UPS oligopoly?




A FedEx delivery driver unloads packages from his truck in Lower Manhattan on June 2, 2017 in New York City.
A FedEx delivery driver unloads packages from his truck in Lower Manhattan on June 2, 2017 in New York City.
Drew Angerer/Getty Images

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It comes as no surprise that Amazon may have plans to compete with FedEx and the United Parcel Service.

As reported by The Wall Street Journal, the tech giant is planning to launch a delivery service for businesses, which means it could eventually rival other services that have dominated the shipping market.

Amazon is certainly poised for the move. The company is known for its one-day package delivery for third-party sellers. But expanding Amazon’s reach to the national shipping business is still an ambitious plan. They have leased up to 40 planes and about 300 warehouses in the U.S., and that is a far cry from what they need to compete with UPS and FedEx, which dominate the delivery service market. FedEx has about 650 aircraft and 4,800 operating facilities, which ship internationally.

But this isn’t the first time Amazon has taken on a well established industry. Remember brick and mortar bookstores? While there wasn’t an oligopoly there, it just goes to show how far Amazon could go.

Larry speaks to a reporter and an e-commerce analyst to find out more about the company’s future in the delivery world.

Guests:

Laura Stevens, a San Francisco-based e-commerce reporter for the Wall Street Journal; she co-wrote the article, “What It Would Take for Amazon to Become UPS or FedEx”; she tweets @LauraStevensWSJ

Sucharita Kodali, e-commerce analyst at Forrester Research, a technology research and advisory firm based in Cambridge, MA; she tweets @smulpuru