Amazon shadow over FedEx and UPS

|About: FedEx Corporation (FDX)|By:, SA News Editor

Analysts continue to warn on the impact on FedEx (FDX +0.8%) and UPS (UPS +0.4%) of Amazon growing a third-party logistics provider service and use of USPS as its main transportation provider.

"In the last three years, Amazon has built a global end-to-end logistics network that comprises of their own internal last-mile network, their own trucks, their own trains, their own planes, their own truck brokerage, and their own air and ocean freight forwarding," observes Morgan Stanley's Ravi Shanker.

UBS analyst Thomas Wadewitz notes that there are only "limited" ways in which FedEx and UPS can fight back against Amazon's broad package delivery offering in the U.S "They could raise price during peak or on low density shipments... However, the efficacy of pushing these levers may be limited as higher delivery cost from the three network players provides greater incentive for Amazon to invest even more aggressively in its own package delivery capability," he notes.

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