Ups Amazon Agreement
December 19, 2020
Most companies see their UPS and FedEx delivery operators every day and are based on first names. But as of last week, only one of these drivers will bring packages from Amazon. Although Tomé (the great toh-MAY) is the first CEO in its 112-year history to come from upS management, she has been a member of the board of directors since 2003, which makes her aware of the problem. Tomé`s two decades at Home Depot also gave her a glimpse into Amazon`s power as a competitor, long before it became a UPS priority in Atlanta. While Shanker called the news a “turning point” in the parcel industry, he added that it could hurt FedEx`s future margins more than he could help elsewhere. The Wyoming native jackson is also known for her dedicated public performances. At the end of a simulation of home depot acclaim in a 2012 presentation to the University of Denver Business School, where Tomé had earned his MBA, the cheering leader asked, “What are we going to do?” Tomé shouted a response on how to hit the competition in the back. Getting this package at home is first and foremost the reason why Amazon has paid tens of billions to FedEx and UPS over the years. This is also why the company is now distancing itself from such contracts, not only with parcel companies, but also with companies that transport products by sea and air. In 2016, Amazon launched its Prime Air brand, which includes both the ongoing supply of drones and its fleet of cargo aircraft, and has gradually integrated a continuous number of aircraft into its fleet over the years. If Amazon`s business with UPS shrinks as with FedEx and XPO, UPS would be hit hard, Shanker said. The decision should come as no surprise to Amazon, which has been building its own delivery infrastructure for years to reduce logistics costs and maintain greater control over how its products range from manufacturers to Amazon warehouses to customers` homes.
The company oversees an extensive network of storage, air hub and cargo logistics, in addition to a growing network of flex personnel transport drivers who are used under a contract model similar to Uber. “We will be tougher, we will be better prepared and we will be less tolerant of any kind of concessions,” O`Brien said in an interview. “There is evidence that two-tier wage systems are not working.” Amazon has already shown a willingness to carry over many of its own items. XPO Logistics, another major transportation company, could lose hundreds of millions of revenue this year after a customer, who is widely assumed that Amazon has scaled back its business with XPO, reported in February.