FedEx Cutbacks Could Boost Amazon Fulfillment

Amazon’s logistics and other efforts are reportedly contributing to FedEx’s declining package volume and lower-than-expected revenue reported for the most recent quarter.

With its investments in logistics, discounted shipping rates, free shipping software and other benefits for sellers, Amazon is taking package volume away from competitors like FedEx, Yahoo Finance reported Friday (Sept. 16), citing a J.P. Morgan note to clients.

“Amazon has piled money into its logistics capability over the past few years, to the point it has excess capacity for its own needs and is hungry for more share, which is being targeted through FBA (Fulfillment by Amazon) and could be weighing on FedEx,” J.P. Morgan’s Jack Atherton wrote in the note, per the report. “I’d be buying Amazon on weakness here.”

As PYMNTS reported Thursday (Sept. 15), FedEx announced in a business update that it is cutting costs, freezing hiring, closing 90 offices and parking some cargo aircraft after seeing fiscal first quarter revenue that was below expectations.

Read more: FedEx Closes Stores and Grounds Planes as eCommerce Volume Falls

“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.,” FedEx President and CEO Raj Subramaniam said in the business update.

One day earlier, Amazon announced at its annual seller conference, Accelerate, several new marketing solutions that are to be part of its Buy With Prime program that gives online merchants the ability to offer Prime Shopping benefits to shoppers off Amazon.

See more: Amazon Rolls out Red Carpet for Sellers With Buy With Prime, Alexa Upgrades

A day later, also at Accelerate, Amazon announced better ways for sellers to fulfill orders, build data and analyze their business.

Read more: Amazon Buys Shipping Software Veeqo, Adds Fulfillment Dashboard, Seller Analytics

One of the features is a new Fulfillment by Amazon (FBA) Dashboard, which will provide a summary of key performance metrics for FBA businesses and offer real-time tracking and updates.

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