UPS Keeps Close Ties with Amazon

In addition to FedEx terminating their ground shipping contracts with Amazon and Amazon working to improve their own delivery service, UPS had to make the decision whether they should continue to work alongside the e-commerce giant or cut their ties as well.

For now, UPS will stay as a partner with Amazon, as it is mutually beneficial. While the shipping company makes almost 10% off Amazon’s revenue, Amazon also needs outside carriers like UPS to meet its shipping needs during peak seasons. UPS’s decision to stay could be risky if Amazon chooses to further establish their own delivery network, allowing them to eliminate any other regional shipper. The potential of losing that massive a company could have a considerable impact on UPS’s revenue and ability to fill its package-delivery network.

For the foreseeable future, Amazon and UPS will remain as strategic partners. One statement in a Wall Street Journal article said, “Given the immense addressable market in e-commerce, both Amazon and UPS can thrive. They both need each other to satisfy the insatiable demand.”

Wall Street Continues to Cheer on Amazon

Recently, Amazon has gone under the microscope for their business practices. Despite the spiraling criticism and loss of one of their major shippers, FedEx, the e-commerce company continues to remain on top. Regularly adding new industries to their business, Amazon is solidifying its role as a global leader in almost everything.

This success is evident amongst Amazon’s stock as well, according to CNBC. For the fourth month in a row, all 45 of Wall Street’s analysts have recommended investing in Amazon. This means that the company is one of three in the S&P 500 who have perfect buy ratings. Amazon also outperforming the S&P 500 index at 16%, with its stock up by 20% in 2019.

 

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