Amazon, a new challenge for FedEx and UPS

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By Vincent Valery

Introduction 

Oct. 7, 2019, © Leeham News: Amazon’s moves into ACMI air service, a dramatic construction of an air freight operation and entering ground delivery services threatens FedEx and UPS.

Although UPS last week beat Amazon to the punch with approval from the Federal Aviation Administration for drone-based package deliveries, Amazon was first to advance the idea.

FedEx canceled its contracts with Amazon as the latter moved into ground delivery. FedEx revenues have fallen sharply in recent months.

Summary
  • Growing Amazon footprint in delivery business;
  • Leads to direct competition with FedEx and UPS;
  • Drone delivery development;
  • A threat to traditional delivery service business model;
  • Trade slump exposes FedEx more.

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Predictive power of cargo volumes

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By Vincent Valery

July 8, 2019, © Leeham News: It has been said that the collapse of freight volumes in the second half of 2008 preceded the sharp drop in passenger traffic. Cargo also allegedly led the passenger recovery in the second half of 2009. We will verify with IATA data whether the data backs such claim.

We will also check whether cargo volumes still have as much predictive power in the post Great Recession world. The current context of increasing trade tensions and signs of economic slowdown make this analysis relevant. We will ponder whether the next global recession is around the corner.

Credit: Cathay Pacific.

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