Industry

Amazon may overtake UPS and FedEx, delivers over 2.5 billion packages a year in the U.S.

File photo.

File photo.   | Photo Credit: Reuters

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Amazon has added 15 cargo aircraft to its fleet, and aims to reach 70 planes by 2021.

Amazon is now delivering almost 50% of its packages itself, especially in the urban centres globally, according to Morgan Stanley estimates, first reported by CNBC.

In a serious threat to package-delivery giants, Amazon Logistics ships more than 2.5 billion packages a year in the US, while FedEx ships 3 billion and UPS 4.7 billion.

Analysts estimate the company’s in-house shipping and delivery service will soon overtake UPS and FedEx in the total volume of packages delivered in the U.S. Amazon’s deliveries will probably reach 6.5 billion by 2022 for $10 a package, analysts said.

Amazon’s number doubled in just the last year alone, from delivering about 20 percent of all of its own packages to now about half (46%). The company still relies on third-party couriers for its last-mile deliveries in rural regions.

After losing air-shipping contract of global courier company FedEx amid competition, e-commerce major Amazon has added 15 cargo aircraft to its fleet, aiming to reach 70 planes by 2021.

In a bid to expand its airborne ambitions, Amazon is investing $1.5 billion in building a three million square-foot Prime Air airport outside Cincinnati in Kentucky as a parking garage for 100 cargo jets.

“We’re investing $1.5 billion in our new air hub to get you your packages faster. Three million square feet, and it’s going to create 2,000 jobs. And if you’re guessing that driving a front loader was fun, you’re right! #amazon #prime,” Bezos tweeted recently.

Amazon has a few dozen planes flying several hundred flights per week while UPS and FedEx have hundreds of planes flying thousands of flights.

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Printable version | Jan 22, 2020 8:49:22 AM | https://www.thehindu.com/business/Industry/amazon-may-overtake-ups-and-fedex-delivers-over-25-billion-packages-a-year-in-the-us/article30305079.ece

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