Amazon Expects to Become Largest Delivery Service by 2022

Amazon says it expects to become the largest delivery service in the United States by 2022 — surpassing longtime leading couriers FedEx and UPS.

At the end of 2019, UPS was the largest package courier in the U.S., with $84.6 billion in 2020 revenue.

Speaking Nov. 29 on CNBC, Dave Clark, CEO of worldwide consumer at Amazon, said the e-commerce behemoth continues to gradually deliver its own orders rather than rely on third-party services. The company now owns its own fleet of cargo trucks, vans and airplanes.

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Analysts at Bank of America say Amazon was delivering 66% of its own orders to consumers last August, up from 58% at the end of 2019.

“We expect we will be one of the largest carriers in the world by the end of the year,” Clark told “Squawk Box.” “I think we’ll probably be the largest package delivery carrier in the U.S. by early 2022.”

Amazon in 2019 quietly became Mercedes’ largest customer for Sprinter vans — a fleet the company now uses to deliver orders the last mile to consumers.

“These things don’t happen overnight,” Clark said. “We’ve been building the logistics infrastructure, the technology platform that drives it, for two decades now, so we walked into the pandemic in a really good place.”

Amazon Ends FedEx Ground Shipping Ban

Amazon Jan. 14 announced it has resumed using FedEx Ground shipping for e-commerce deliveries. The retail giant made news last month when it informed third-party sellers it had halted using FedEx Ground for Prime shipments, citing poor delivery performance.

The renewal upped FedEx shares, while enabling Amazon to offset in-house shipments via branded Mercedes Sprinter vans. The company made news last year when it announced an order for 20,000 Sprinter vans — the largest commercial vehicle contract for Mercedes.

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In a media statement, Amazon said FedEx Ground and Home services had been meeting the e-commerce giant’s delivery requirements since the winter holidays.

Amazon reportedly shipped 275 million packages over the winter holidays through more than 50 fulfillment centers, Sprinter vans, leased cargo planes, the United Postal Service and UPS (180 million combined packages).

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Walmart Teases One-Day Shipping

The shipping delivery war took another turn after Walmart went to social media to hint it would match Amazon’s decision to switch from free two-day shipping for Prime members to one-day deliveries.

“One-day free shipping … without a membership fee. Now THAT would be groundbreaking. Stay tuned,” Walmart tweeted April 26 the day after Amazon disclosed it would spend upwards of $800 million upgrading internal and external shipping capacity for one-day shipments.

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Amazon charges $119 annually for its Prime membership, which includes free access to movies and TV shows on Amazon Prime Video, music on Prime Music and two-hour delivery (for a fee) for Prime Now store deliveries, among other features.

Amazon’s announcement had a ripple effect on retail stocks, sending Walmart and Target shares down 1.9% and 5.7%, respectively, in April 26 trading.

The switch is expected to put added pressure on big box retailers such as Best Buy, Office Depot and Dick’s Sporting Goods, among others.