retail news in context, analysis with attitude

BidnessEtc has a story about how FedEx Services CEO Mike Glenn this week said that he wasn't too worried about Amazon's apparent desire to get into the freight business and compete with companies like FedEx and UPS.

Glenn said that the company has been "in constant dialogue with them to understand their transportation needs as they've experienced significant growth.”

And, the story says, Glenn "elaborated that the company was looking to invest in transportation, which was driven by its 'need for supplemental capacity related to inventory management.' He added that if the e-commerce company was looking to internalize logistics, it would have to spend billions of dollars and invest substantial time before it would be at a position to give FedEx and United Parcel Service, Inc. a run for their money. He said: 'The reality is it will 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'."

FedEx CEO Fred Smith describes the Amazon issue this way: “Concerns about industry disruption continue to be fueled by fantastical -- and I chose this word carefully -- articles and reports. In all likelihood, the primary deliverers of e-commerce shipments for the foreseeable future will be UPS, the U.S. Postal Service and FedEx.”
KC's View:
I think that FedEx probably has less to worry about in the short-term than Macy's does, but I also think that as Amazon clearly becomes more focused on how it can become more dominant on the last mile to the consumer, it is going to be trying a lot of different approaches. It may not instantly compete in terms of scale with FedEx and UPS, but it is likely to nibble here and there until it finds the game-changing sweet spot that allows it to have real impact ... and both FedEx and UPS need to be vigilant.

Some companies would see "fantastical" as something out of reach. I suspect that Jeff Bezos sees "fantastical" as just this week's challenge.