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Amazon Plans to Contend Against Delivery Titans


Amazon.com will start competing directly, In just a few weeks, with longtime associates United Parcel Service, FedEx and DHL. But not yet in the United States, at least, not for now.

Amazon is anticipated to obtain the 75% of the French package-delivery company Colis Privé that it does not already own, sometime in the first quarter. Although the French company is small relative to the multinational giants that move Amazon parcels around the world, the achievement will be the major phase that the online retail giant has taken to move into the business of delivering packages for others, as well as itself, according to reports.

Amazon has stated little regarding its objectives. It bought a 25% stake in Colis Privé, in 2014. Last year, a representative told the French newspaper Le Figaro that the agreement to get the rest of the company would close early this year. Then the unidentified speaker said Colis Privé will continue proposing package delivery, not just amazing, but for all consumers.

The representative told the French-language paper. “This purchase doesn’t call into question our work with all the other logistics providers (UPS, La Poste, DHL, FedEx),” also added,“And it’s out of the question for Colis Privé to only deliver for Amazon. The company will continue developing its commercial portfolio.”

Craig Berman, Amazon’s top spokesman, failed to comment on Colis Privé or the company’s ideas for the delivery business.

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However,  some experts believe that Amazon is putting together the pieces across the world to start a package-delivery service which one day will compete with FedEx, UPS, and others. In addition to the Colis Privé agreement, Amazon attained the right to buy 4.2% of Yodel, a United Kingdom parcel-delivery company, back in 2014. The previous month, Amazon publicized adding thousands of trucks to its U.S. fleet to deal with the increasing load of packages it is transporting.

It was also reported last month that Amazon is discussing to rent 20 Boeing 767 cargo jets.  Those jets would represent an important growth of an Amazon cargo trial in Wilmington, Ohio, operated by Air Transport Services Group on behalf of Amazon, according to sources.

Amazon wishes to start its own U.S. cargo operations to prevent delays from carriers, for instance UPS and FedEx, which have, once in a while, struggled to keep up with the quick development of e-commerce.

During this past holiday season, FedEx failed to transport some Christmas parcels on time, blaming the extreme weather and a rush in last-minute holiday shopping. Two years ago, it was UPS that struggled with the crush of holiday delivery.

However,  Robert W. Baird & Co. analyst Colin Sebastian trusts that Amazon may be developing a shipping service that meets more than its own delivery needs. He anticipates Amazon to finally offer any excess cargo volume it has to other companies considering to transport goods.

“They have the opportunity to disrupt this market and generate a lot of revenue,” Sebastian stated.

“That is because the worldwide fulfillment market, which consist of shipping and warehousing goods, represents a $400 billion to $450 billion business,” he added.

However,  the analyst points to the development of (AWS) Amazon Web Services as an analogy. The business, which leases computing power and storage for corporate customers, begin as the computing structure that powered the company’s retail website, Amazon.com.

But then again,  as Amazon’s knowledge in developing the building blocks for on-demand computing developed together with its online computing capacity, it started to offer those services to others, based on reports.

“There is nothing like having to manage a process, and then rolling it out to others,” Sebastian said.

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Amazon has welcomed all comers to Amazon Web Services, including competitors like Nordstrom, that competes with Amazon in retail shoes, apparel, and Netflix, that battles with Amazon Prime Instant Video in on-demand subscription programming. It has turned an expense, in the process, the cost of running its computing procedures, into a profit center. Amazon Web Services posted a 25% profit margin, in the third quarter, an amazing figure for a company whose other sections usually produce the narrowest of profits or the more-than-occasional losses.

Amazon invests those profits back into its other businesses, keeping rates low on the retail site and investing in new markets too.

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