Amazon poised to pass UPS and FedEx to become largest U.S. delivery service by early 2022, exec says
Dave Clark, Amazon’s senior vice president of worldwide operations.
Lindsey Wasson | Reuters
Dave Clark, CEO of Amazon‘s worldwide consumer business, said Monday that the company is poised to become the largest U.S. package delivery service by early 2022, overtaking longstanding shipping rivals UPS and FedEx.
“We expect we will be one of the largest carriers in the world by the end of this year,” Clark told CNBC’s Becky Quick in an interview on “Squawk Box.” “I think we’ll probably be the largest package delivery carrier in the U.S. by the time we get to the end of the year, if not in early ’22.”
Amazon has been steadily building up vast logistics and fulfillment operations since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers.
Its goal has been to have greater control over how shoppers’ packages get to their doorsteps. The retail giant now oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding in-house network of planes, trucks and ships. It has also dotted the country with warehouses and air hubs that can speed along packages.
Analysts and investors have long predicted that those tools would enable Amazon to one day rival major carriers like UPS, FedEx and the U.S. Postal Service.
Its shipping operations are growing fast. Bank of America analysts predicted Amazon delivered 58% of its own packages in 2019, making it the fourth-largest delivery service nationwide, according to Digital Commerce 360. By last August, Amazon was estimated to be delivering 66% of its own packages.
Amazon’s in-house delivery operations have become a major advantage during this year’s holiday shopping season, which has been particularly challenging due to the ongoing coronavirus pandemic, a global supply chain crunch and labor shortages.
Beyond leveraging its own trucks and planes, Clark said Amazon has been shipping goods to new ports to avoid blockages.
“These things don’t happen overnight,” Clark said. “We’ve been building the logistics infrastructure, the technology platform that drives it, for two decades now, so we walked into the pandemic in a really good place.”
WATCH: Amazon ramps up delivery service ahead of Black Friday surge