Amazon hasn’t officially confirmed anything, but the company isn’t exactly hiding the fact that it’s trying to build its own shipping network in an effort to cut costs and speed up deliveries. However, building a shipping network is an immensely expensive and time consuming process, which is why FedEx isn’t all that worried about Amazon becoming a competitor anytime soon. Mike Glenn, the executive vice president at FedEx, claimed during an earnings call on Wednesday that the reports of Amazon building its own shipping network are “headline grabbing” stories. According to Glenn, Amazon would have to invest tens of billions of dollars over the course of several years before it could hope to compete with established shipping companies like FedEx or UPS.
FedEx is not concerned about recent reports of Amazon possibly building up an in-house shipping network, and downplayed it as mere “headline grabbing” stories. During its earnings call on Wednesday, FedEx Executive VP Mike Glenn told analysts that building a service that rivals FedEx would simply take too long and cost too much. “While recent stories and reports of a new entity competing with the three major carriers in the United States grabs headlines, the reality is it would be a daunting task requiring tens of billions of dollars in capital and years to build sufficient scale and density to replicate existing networks like FedEx,” Glenn said. He reassured that his partnership with Amazon remains strong and that large retailers have always had their own delivery network to serve their own shipping needs, primarily to move items in and out of warehouses locally. Plus, FedEx’s service portfolio far exceeds simple local delivery, spanning everything from express to ground to freight. “There are hundreds and thousands of local delivery companies in every market in the country delivering parcels,” Glenn continued. “That’s not the market that FedEx competes in on a day-to-day basis.” “We have the capability to pick up, transport and deliver an item from 95% of the human beings on the planet, much less every business in the world, within one to two business days, door to door, customs cleared,” he added.
