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Amazon looks to decimate UPS and FedEx as it moves into shipping industry

By Axios Future

Amazon appears to be lowballing rivals in a classic squeeze to take over yet another industry: freight. Why it matters: With its track record of upending nearly every business it enters, Amazon hasRead full story

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  • Amazon took live its digital freight brokerage platform, undercutting market prices from 26 to 33%, according to FreightWaves.

    This move follows Amazon's playbook:

    1. disintermediate to survive;

    2. monetize to fund innovation;

    3. innovate to grow;

    4. disintermediate to survive… and so on

    How will

    Amazon took live its digital freight brokerage platform, undercutting market prices from 26 to 33%, according to FreightWaves.

    This move follows Amazon's playbook:

    1. disintermediate to survive;

    2. monetize to fund innovation;

    3. innovate to grow;

    4. disintermediate to survive… and so on

    How will industry's incumbents compete against a player that's willing to forego all margins or even below cost for a long period of time to gain market share?

    In the context of international trade, when manufacturers export a product to another country at a price below the normal price with the objective to increase market share, it has a name: it's called dumping.

    Will regulators step in?

  • The biggest losers in this dogfight are the drivers. The job is dangerous and demanding. With most of the risks ( time, weather, traffic) downloaded on to the driver who are traditionally paid by the mile or by the load. To make up for lower revenues trucking companies will increase the pressure on drivers

    The biggest losers in this dogfight are the drivers. The job is dangerous and demanding. With most of the risks ( time, weather, traffic) downloaded on to the driver who are traditionally paid by the mile or by the load. To make up for lower revenues trucking companies will increase the pressure on drivers to work longer hours often defying the hours of service laws.

    Danger low pay and poor treatment means driving a big rig is no longer a viable job. No drivers no loads delivered. Simple math we could all starve.

  • Even if they never make a dent, great leverage in negotiating with UPS and FedEx. Amazon is a credible threat even when it might never be a credible threat, somehow.

  • It is worth asking this question: is this form of leverage of Amazon’s dominance in digital commerce and web services in the national interest? If so, should there be limits?

  • Amazon classic move and while freight companies should be very worried, consumers might pay the ultimate price. If Amazon undercuts everyone else, they'll start having market power, making every other company that doesn't uses their service inferior in the eyes of the consumer.

    It also allows them

    Amazon classic move and while freight companies should be very worried, consumers might pay the ultimate price. If Amazon undercuts everyone else, they'll start having market power, making every other company that doesn't uses their service inferior in the eyes of the consumer.

    It also allows them to expand their reach and their potential to deploy autonomous trucks, because trust me, that's where this will head towards.

    As many pointed out, it is probably time Congress emends their antitrust regulation because this move will drastically reduce competition and potential new options for the consumer.

  • Now. If only Amazon could use this leverage to decarbonize the transport and logistics business ......Imagine what that would do to the climate footprint of the transport and logistics business? Cheap clean and fast delivery—Amazon CleanPrimeTime?

  • Disrupt or be disrupted. Vertical integration will allow Amazon to tighten its control of the customer experience even more, a huge competitive advantage.

  • Wow this could be huge. And long overdue

  • If Amazon has anything it has the knowledge of data and analytics that allows it to use its try and trusted platforms to remove inefficiencies in slow to respond sectors. This is complemented by its other activities that can even put further pressure on competitors in that particular sector should they

    If Amazon has anything it has the knowledge of data and analytics that allows it to use its try and trusted platforms to remove inefficiencies in slow to respond sectors. This is complemented by its other activities that can even put further pressure on competitors in that particular sector should they embrace technology and AI.

    My question would be is Amazon going to become too large to manage that the over reliance of AI would mean its demise in the actual sense or in the form of new competitors?

  • The problem is quality. Even Amazon customer service acknowledges this. Amazon drivers toss packages carelessly onto porches, over fences, etc.

  • Uh oh. Logistics companies better get into a room and start innovating, planning, scheming, and plotting because Amazon is coming. I know first hand the significant costs of freight and would welcome competition to bring the costs down.

  • To John's point, the actual victims in this competitive battle will end up being the drivers, and all of the workers involved across the entire logistics chain. In the long run, for the competitiveness of either businesses or even the entire nation, driving costs and improving operational efficiencies

    To John's point, the actual victims in this competitive battle will end up being the drivers, and all of the workers involved across the entire logistics chain. In the long run, for the competitiveness of either businesses or even the entire nation, driving costs and improving operational efficiencies is necessary. However ahead of that, with no planning for the workforce that are going to be disenfranchised and brutalized, the result will be impactful.

  • I have not been driving that long but maybe it is time for a meeting with the drivers to find out what we want to do about things if it gets worse. Sometimes we have to stop them from messing up our paychecks. Because they are already at the top and don’t need to worry about the ones who haven’t got there yet.

  • There are no losers in reducing the cost of production . That is the essence of capitalism . Eventually everyone wins by being able to buy more goods and services with his paycheck . That means that the wealth of the individual consumer and the nation are increasing .

  • I worked in logistics as dispatcher/operations mgr/ logistics mgr. The industry got deregulated in the 80s. Competition reduced the profits and caused drivers to circumvent DOT rules. Higher efficiencies in matching trucks and loads has helped with costs.

    For drivers, they are always once step from

    I worked in logistics as dispatcher/operations mgr/ logistics mgr. The industry got deregulated in the 80s. Competition reduced the profits and caused drivers to circumvent DOT rules. Higher efficiencies in matching trucks and loads has helped with costs.

    For drivers, they are always once step from not being able to drive. Physical injury( chronic back problems, knees, rolled ankles), driving violations( speeding to make your delivery, driving too long to make your delivery), driving so much that they have no home life. Drivering truck has become a poor career choice for most.

  • Freight is am over priced market. Shake it up Amazon !

  • Low balling seems to be the new normal. At what cost?

  • It was only a matter of time, right? Let's not ask if they're too big yet 😊

  • From the perspective of competition and monopoly power Amazon's attempt to dominate yet another market and society's willingness to indulge is setting a dangerous precedent for traditional American Capitalism. If one were to dig into the lobbying power of Amazon, funding of media organizations, and the

    From the perspective of competition and monopoly power Amazon's attempt to dominate yet another market and society's willingness to indulge is setting a dangerous precedent for traditional American Capitalism. If one were to dig into the lobbying power of Amazon, funding of media organizations, and the absence of federal taxes, you could argue we are bringing back Mercantilism. Amazon is literally controlling almost every aspect of our lives to include private personal data through multiple sources.

  • Those small trucks Amazon have instantly hinder them from carrying the loads and over 70 lbs packages that UPS has made the standard in the last 20 years. They may be starting out, but the professionalism and performance will have to be acheived that UPS has. I think they are over reaching.

  • I still can't come to terms with zero taxes paid by the behemoth that is Amazon. No wonder they have money enough to undercut the competition for a long enough period to put them out of business.

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