As Amazon begins ramping up its own proprietary delivery fleet, it's not just retailers facing competition from the e-commerce behemoth — FedEx and UPS are also under pressure. Shares of both tanked after Amazon's announcement that it planned to launch a delivery service.
But it will take a long time before Amazon is able to disassociate from existing delivery companies. At the moment, UPS, which shipped 4.9 billion packages and documents in 2016 and FedEx, which said it expected to ship between 380 million and 400 million packages during the 2017 holiday season, are still safely in the shipping lead, with DHL also picking up a fair amount of share.
Yet as online sales increase, the shipping industry is looking for new ways to deliver.
According to shipping industry specialists, the last mile is where retailers are most likely to see significant change. "Final mile is becoming so hot right now because we’re trying to keep long hauls along a main line," Terese Kerrigan, director of marketing communications for FreightCenter, a third party shipping provider that handles logistics. "You're going to see more last-mile moving in smaller vehicles."
What's next? Even as legacy shipping companies race with Google, Amazon, Walmart and new entrepreneurial ventures to solve some of the biggest delivery conundrums, it's hard for experts to predict what’s going to work in the long run.