FedEx Not Worried About Amazon’s Logistics Moves

As reported by Supply Chain 24/7:

Over the past few months, talk has been building about Amazon working on its own logistics service to compete against FedEx and UPS, especially after the e-commerce giant recently confirmed it plans to lease a fleet of 20 jet airplanes.

Now, FedEx has finally responded to the rumors.

FedEx CEO Mike Glenn stated “While recent stories and reports of a new entity competing with the three major carriers in the United States grabs headlines, the reality is it will be a daunting task requiring tens of billions of dollars in capital and years to build sufficient scale and density to replicate existing networks like FedEx.”

Glenn also said that he’s been aware of Amazon’s need to ramp up its logistics capabilities, and acknowledged that Amazon is supplementing FedEx with its own services. But those investments don’t mean that Amazon will stop using FedEx, he said.

“Amazon is a valuable customer that we’ve worked with for many years and we expect to work with them for many years to come,” Glenn said.

And even if Amazon decided to stop using FedEx, the shipping company would still be fine, according to Glenn.

“No one FedEx customer represents more than approximately 3% of total revenue,” he said. “We manage these relationships carefully to ensure we don’t become overly dependent on any one customer.”

While Glenn is certain, analysts are split on Amazon’s ultimate logistics strategy.

Ken Wood is the founder of LJM Consultants. LJM helps clients negotiate “Best in Class” UPS/FedEx agreements. LJM was recently named the “best parcel auditing company in America” and was also inducted into Inc. Magazine’s Top 500/5000 fastest growing companies in America for 2013. To learn how LJM Consultants can help your company get the parcel contract you deserve, call 631-844-9500 or email kenwood@myLJM.com.