Amazon Takes the Delivery Throne From UPS and FedEx

Amazon Takes the Delivery Throne From UPS and FedEx

Amazon will deliver more packages in 2023 than anyone, according to a report Monday from the Wall Street Journal. The tech giant is on track to surpass UPS and FedEx in shipping volume this year, and it seems fitting that a tech giant will undoubtedly ship more gifts than anyone this Cyber Monday.

There’s a quiet changing of the guard in the delivery sector. Amazon is on track to deliver 5.9 billion packages in 2023, according to internal projections seen by the Wall Street Journal. That would surpass the 5.3 billion packages delivered from UPS and 3.3 billion from FedEx in 2022, which neither company expects to break in 2023. What started as a logistics-obsessed electronic marketplace for books has grown into the largest shipping company in the world.

Amazon pulled slightly ahead of UPS in shipping this year, a byproduct of its absolute dominance in online retail. Thanksgiving through Cyber Monday is the biggest e-commerce weekend of the year. The company sold nearly 500 million items during the holiday weekend in 2022, breaking all previous records. The Seattle tech company dominates over 37% of the online retail market. The next largest retailers combined—Walmart, Apple, and eBay—control less than half of Amazon’s market share. Amazon’s fulfillment dominance is a long-planned vertical integration, part of a larger effort to control all steps of its business.

Last month, Amazon announced it would hire 250,000 U.S. employees this holiday season to meet the needs of its growing delivery service. Meanwhile, UPS recently cut its 2023 projections for package volume, citing weakened demand around its holiday season. UPS shares touched their lowest stock in three years last month, as the UPS drivers’ ongoing fight for fair wages showed up in earnings. UPS’s struggle with its workforce occurred in the shadows of Amazon’s expanding fulfillment business.

Also on Monday, Amazon narrowly avoided a flare-up with labor rights groups. A 20,000-person strike from Spanish warehouse and delivery workers was settled just hours before Cyber Monday deals began flowing in. Reuters reports that Amazon reached an agreement with workers in Spain on the busiest online shopping day of the year, and caved to negotiate on improved pay and work conditions.

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