Will Amazon Bankrupt UPS and Fedex?

Added: 2026-05-07

[00:00:00]Hey everyone, Tim here. Back again trucking the sevenc's. Uh, wanted to talk about the announcement by Amazon.

[00:00:07]They're opening up something, I guess call a new endeavor called the Amazon supply chain services. Uh, someone sent me a link to it a couple days ago on May the 4th.

[00:00:21]And basically what it is, Amazon is now going to be competing against UPS and FedEx for parcel shipments. I guess that's an oversimplification, I think, but that's what the announcement says. So right now Amazon and their trailer network and their relay network and their carriers and drivers like myself, we are only hauling Amazon packages almost almost entirely like 99% Amazon packages.

[00:00:56]We go to the distribution centers, pick up an Amazon load, and that Amazon load consists of Amazon packages going to uh generally people's houses.

[00:01:08]And that's what we're basically been doing. What Amazon announced a few days ago is that they are now going to be hauling non- Amazon packages as well or non- Amazon shipments as well for a fee.

[00:01:23]So basically they're going to be competing against UPS and FedEx and I guess the postal service as well, but that one's less less of a player nowadays. And that's an interesting decision. So had a viewer ask me about it and had another friend viewer sent me that link. So I thought I might talk about it. My first uh response to that is, "Yeah, that makes a lot of sense. It makes perfect sense for them to be doing that." And I had a had a thought or a uh kind of light bulb go off a couple of years ago when it comes to Amazon. Um so Amazon of course as we know is a um software company, right? They're a uh tech company, right? So they got the Amazon website. So they're a tech company, right?

[00:02:17]No, they are not. They are no longer a tech company. Now, Amazon AWS is definitely a tech company and that's kind of a big part of their uh um infrastructure right now. However, I would argue very clearly that Amazon is no longer a tech company.

[00:02:36]Amazon is a logistics company. They have hundreds if not thousand probably thousands of distribution centers all across the United States. Very robust, very developed. They've invested billions, tens of billions, maybe even hundreds of billions, I don't know, of dollars into these distribution networks and they are absolutely on par and even superior to UPS and FedEx's distribution networks. Amazon is a logistics company at this point with the exception of like the AWS. Okay, I get that that that leg of it is uh tech, but their meat their uh meat and potatoes, their uh Amazon.com website, it's a distribution website. Like it well, it's a distribution, it's a logistics company. It's not a tech company anymore. Their website isn't even that it's not even that good by today's standards, right? You could probably make Amazon the Amazon website very easily in a couple of weeks and rival their website itself, right? Their strength lies in their logistics network and yeah, so they're a logistics company. So the fact they're moving into basically parcel shipments or whatever they're going to do makes perfect sense.

[00:03:51]So they already had there were a couple of uh names that uh got dropped as customers for Amazon. And the two I remember were Proctor and Gamble and 3M.

[00:04:02]Uh, Proctor and Gamble, we all know them, baby powder and lotion, all that.

[00:04:05]And then 3M is like a I I they have a lot of like products like tape, like double-sided tape and stuff like that um that uh they they uh that 3M makes and distri distributes.

[00:04:19]So, Amazon said basically those were a couple of the customers and there were a couple of others uh on there as well, but those were the ones that stuck out.

[00:04:27]So, seems like we use Proctor and Gamble is going to be using Amazon's logistics network, its distribution centers to haul their products and ship their products, baby lotion, whatever, across the United States. And that's fascinating because I don't I don't understand if they're going to be doing that like they're not going to be using parcels for that, right? So, you wouldn't like have like a parcel of baby lotion that was a dedicated like Proctor and Gamble thing like somebody might buy baby lotion on Amazon of course and then or whatever. You know, I'm using Baby Lotion as an example and it might get sent to their house but you know you wouldn't need to link up with Proctor and Gamble to do that. Amazon's already doing that. So it sounds like sounds like there are going to be like dedicated shipments of Proctor and Gamble goods that Amazon is going to manage for them and ship out for them.

[00:05:30]So there will be like an entire truckload of Proctor and Gamble products that Amazon supply chain services will now ship out for Proctor and Gamble. Okay.

[00:05:44]And maybe they will do some more LTL stuff as well. And would probably LTL would probably be a part of it as well.

[00:05:51]It may not be an entire truckload. It might be LTL. And the LTL would make a lot of sense or like partial shipments would make a lot of sense because when I go and I pick up these loads for for Amazon, right? So I use Bonderant Iowa as a pretty good example. I've been going to Bonder Iowa quite a bit and picking up a load from Bonder Iowa and going wherever. And every time I go to Bonder in Iowa, the pickup time will be like, you know, whatever, noon, right? So, I got to pick up time at noon. And no matter how early I am, uh, the trailer's never ready.

[00:06:28]And I'm not really re able to get it early ever because what Amazon is doing is they are loading up the trailer with product and they are loading as much product in there as they can by noon.

[00:06:45]And they're not going to let it out early because sometimes they'll get a shipment and then they'll rush it onto that trailer uh before noon and then that shipment uh that you know package or whatever is then on the trailer going to wherever it's going. So why I bring that up is because a lot of the times like this shipment will go out at noon no matter how full or how empty it is.

[00:07:09]And it's almost always empty. Like these loads I've been saying are like 5,000 pounds on average, right? So, I'll, you know, I'll pull it from the dock. I'll pull the trailer from the dock.

[00:07:19]I'll look in the trailer and it's only like maybe a quarter full, maybe a half full on average.

[00:07:27]So, they have a lot more room in that trailer. So, I could see them. So, this makes a lot of sense. Like, they have room on their trailers. Like, they are almost never at capacity. Uh, except for maybe uh the holiday season. Like Christmas season, they're probably at capacity. But generally speaking, they they have a lot of room on their trailers. So, it makes perfect sense that they would link up with other third party uh companies that need to distribute something and start distributing uh you know, Proctor and Gamble or 3M goods.

[00:08:02]Um so, yeah, that makes perfect sense. And to be honest, I think they're gonna really take a bite out of UPS and FedEx and I guess the postal service as well, but the postal service will never go bankrupt because federal government uh thing, but that's another matter. So, I'm just looking at that going, "Yeah, that this just makes perfect sense." As somebody who picks up the load and like a lot of times the loads are just like half empty, I'm like, "Yeah, there's there's there's a lot of room in here for other things to be put in." Um, and I think uh what was it? I looked at the UPS stock uh yesterday and it was down like 10% since this got announced.

[00:08:46]So yeah, sucks for UPS, I guess. Um, yeah, sucks for UPS. So yeah, and from a driver perspective, Amazon Relay carrier perspective, this is really good for me because the more product they have, the more business Amazon Relay has, the better it is for me. Um, you know, because that's just more loads that Amazon is going to need to ship.

[00:09:20]More product to ship means they need more drivers means that they'll, you know, upward pressure on the rates in terms of Amazon relay, which means I get more well, I have more loads available to haul. So, good for me. I loved hearing that. When I saw that, I'm like, "Oh, cool. That that's good for me.

[00:09:40]That's that means more loads from Amazon."

[00:09:44]Um, bad for UPS, bad for FedEx, bad for Postal Service, and I don't know, maybe a little bit of a monopoly developing here potentially. I mean, Amazon is just so huge um that, you know, it's almost like they could start to dominate too much because if they can get into it, I mean, their distribution centers are huge.

[00:10:10]They're everywhere. They're very robust.

[00:10:12]So, I mean, I don't see like UPS or FedEx going out of business, but I could definitely see them starting to monopolize some logistics network. Um, maybe to an extent, but it'll probably take a long time and be super far down the road. Um, I don't think we'll see them being broken up anytime soon um in terms of the monopoly goes. So, anyways, just some of my thoughts on that. Uh, Amazon is going to start competing against UPS and FedEx.

[00:10:48]Okay, good. That's more loads for me.

[00:10:50]Certainly makes a ton of sense and I can't wait to see uh what this entails.

[00:10:54]I haven't seen any um immediate or immediate uh movements, right? I think this will probably get rolled out over the next year or two. Uh, and like it's not going to be like tomorrow all of a sudden I'm just hauling loads for Proctor and Gamble constantly or uh at 3M constantly or whatever. I think you're going to see this get rolled out over the course of years. over the course of the next year it'll probably start to really kick into high gear and then probably two years it'll be like Amazon will just be rolling uh with a lot more loads and yeah so they got a ton of I mean they got a huge logistics network they got just tens of thousands of trailers tens of thousands of drivers both carrier owner operators like myself and company drivers so this move on their half makes perfect sense And those are my thoughts on that. Let me know what you guys think.

[00:11:55]That's all I got. Thanks for watching.