In the past, Amazon.com, Inc. AMZN 0.93%’s explosive growth had been good news for shippers United Parcel Service, Inc. UPS 0.15% and FedEx Corporation FDX 0.5%. However, as Amazon grows, it will continue to be become less reliant upon FedEx and UPS.
No Need To Worry, Says Bernstein
However, according to Bernstein analyst David Vernon, FedEx and UPS investors have nothing to fear.
“Assuming Amazon and other retailers continue to rely less on UPS and FDX, which is reasonable as density builds, the demand for e-commerce deliveries by the national carriers should still yield a reasonable 7–10 percent growth,” Vernon explained.
E-Commerce Shipping May Decrease, But The Market Will Boom
Bernstein projects that, while FedEx and UPS’s share of e-commerce shipping will continue to decline, the e-commerce market will grow at a strong enough pace to more than offset the declining share.
In the past four years, FedEx and UPS’s share of Amazon package volume has dropped from around 60 percent to its current range of between 30 and 40 percent. However, Bernstein projects…
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