FedEx CMO dismisses Amazon’s brand new delivery service

FedEx isn’t too worried about Amazon’s continued expansion in delivery in addition to also logistics.

During FedEx’s earnings call on Monday, the company’s executive VP in addition to also chief marketing in addition to also communications officer Rajesh Subramaniam downplayed Amazon’s logistics threat, saying This particular shouldn’t be “confused as competition with FedEx.”

“While there has been significant media interest in what Amazon will be doing to expand their in-source delivery capability, This particular should not be confused as competition with FedEx,” Subramaniam said. “The global infrastructure, the technology, the capabilities, knowledge which’s needed to compete in our business will be quite extraordinary, in addition to also we have built which up over 40-plus years.”

Subramaniam’s comment was in response to a question asking about Amazon’s Delivery Service Partners, a brand new program designed to let entrepreneurs run their own local delivery networks of up to 40 vans. Amazon said each Delivery Service Partner can start a business with as little as a $10,000 investment in addition to also which successful partners could make up to $300,000 in annual profit.

Subramaniam added which Amazon will be a “longstanding customer” of FedEx, in addition to also which no one customer accounts for more than 3 percent of the company’s revenue. He also said Amazon in addition to also different customers have built their own in-house delivery network to deal with “capacity issues” — an explanation Amazon has made previously as well.

This particular isn’t the very first time FedEx downplayed Amazon’s threat as a competitor. In 2016, as media reports suggested Amazon was getting serious about building its own delivery service, FedEx’s former executive VP T. Michael Glenn said This particular would likely be a “daunting task requiring tens of billions of dollars” to build in addition to also replicate FedEx’s existing delivery network. Earlier This particular year, FedEx management reportedly told a Bank of America analyst which This particular would likely be difficult for Amazon to “match FedEx’s density.”

Still, the market seems less convinced. Following a Wall Street Journal report which Amazon will be preparing to launch its own delivery service in February, FedEx shares dropped almost 4 percent.

Besides the brand new Delivery Service Partners program, Amazon runs its own network of delivery trucks to handle a part of its package volume in addition to also launched an Uber-like delivery network called Flex as well.

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