Amazon Suspends Plan to Compete With UPS and FedEx

Amazon Suspends Plan to Compete With UPS and FedEx

While Amazon has various Amazon Prime delivery vans, the company doesn’t have a fully dedicated shipping arm. The company had been thinking about competing with UPS and FedEx and other shipping companies. But Amazon has announced that it will suspend its plan to compete with those companies.

The Amazon Shipping service will suspend its operations in June. The news comes from a report in the Wall Street Journal.

Amazon Suspends Plan to Compete
Amazon Suspends Plan to Compete

Amazon announced it would suspend its plans due to a need to handle customer orders. Amazon has been trying to gather new employees to meet customer demands. But there have been problems involved surrounding the health needs of employees and concerns over whether Amazon is a worthwhile place for people to work.

The plan for Amazon has been to try and grow into a new form of service. The hope for the company is to expand to offer to ship. The Amazon Shipping service may have some features similar to what it offers for Prime shipping. But the new shipping effort would be focused mainly on handling packages of all sorts while providing the same things that UPS and FedEx currently have to offer.

Expansion Delayed

Amazon had been hoping to expand its Amazon Shipping service to more places around the world. Amazon Shipping is available in a few markets around the United States, most notably in Los Angeles. The service handles Amazon Marketplace packages and various non-Amazon packages.

But the rise in online retail has made it harder for Amazon to figure out what the demand for the service would become. Amazon is aiming to hire about 100,000 new warehouse and delivery workers. Many of these figures would presumably work as part of the Amazon Shipping expansion.

Details on where Amazon would expand the service are unclear.

Timing For Deliveries

One point that might impact Amazon’s ability to set up its service entails how it times its delivery efforts. Amazon prides itself on being capable of getting its orders out to people in one or two days after the purchase. But with the ongoing crunch on Amazon’s resources, it would be difficult for Amazon to be capable of getting its items out on time.

A Boost For Competitors

UPS and FedEx both saw increases in their stock values after Amazon made this announcement suspending its shipping expansion. The two saw their shares increase by about two per cent each.

There had been some concerns surrounding how well UPS and FedEx could compete, especially with Amazon having taken a mass amount of business. The Amazon Shipping service would focus on actions that go beyond what Amazon sells. Part of this includes working with third parties to ship their products. The goal for Amazon Shipping would be to be a direct option for shipping.

Whether Amazon will continue its plan to offer shipping service in the future is unclear. But the point about Amazon’s work could prove to be intriguing for its future operation. The point is especially considering how the company is aiming to increase its workforce for more things in the future.

Jothi Venkat

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