Amazon just quietly confirmed it is competing with UPS and FedEx (AMZN)

Mark Makela/Reuters

Amazon declared in its 2018 annual filing that it competes against transportation and logistics companies, as CNBC first reported.
It’s a clear warning shot against UPS and FedEx, two companies that used to claim Amazon is simply their customer.
Meanwhile, Amazon CFO Brian Olsavsky told analysts last week that the retail giant will "continue to expand (its) Amazon logistics and (its) delivery capability" in 2019.

Each quarter, corporations dutifully report the "Risk Factors" facing their company to the public and investors in SEC filings.

Amazon’s annual reports usually first highlight the "intense competition" the retail juggernaut faces. In 2017, that predictably included "retail, e-commerce services, digital content and electronic devices, and web and infrastructure computing services."

This year, Amazon added another industry in which they’re facing competition — "transportation and logistics services," as CNBC’s Eugene Kim reported on Feb. 5.

That’s a clear warning shot to UPS and FedEx. Both transportation companies have long claimed Amazon is just a good customer.

But the tide is starting to turn. UPS CEO David Abney told Business Insider last week that UPS "monitor(s) them (Amazon) as is if they were a competitor." And FedEx claimed, seemingly out of nowhere, last week that Amazon is not their largest competitor, claiming just 1.3% of the company’s 2018 revenue.

Amazon’s annual filing, which was released last week, had the following entry under "Risk Factors" (emphasis ours):

We Face Intense Competition

Our businesses are rapidly evolving and intensely competitive, and we have many competitors in different industries, including physical, e-commerce, and omnichannel retail, e-commerce services, digital content and electronic devices, web and infrastructure computing services, and transportation and logistics services, and across geographies, including cross-border competition.

That bolded phrase, as CNBC reported, hasn’t been seen on an Amazon quarterly or annual filing before.

And in the sentence following, the phrase we’ve bolded is also totally new in an Amazon annual filing:

Some of our current and potential competitors have greater resources, longer histories, more customers, and/or greater brand recognition, particularly with our newly-launched products and services and in our newer geographic regions. They may secure better terms from vendors, adopt more aggressive pricing, and devote more resources to technology, infrastructure, fulfillment, and marketing.

One of those newly-launched services in logistics could be Amazon Shipping , which just expanded its home shipping services to the New York area. The service, already in Los Angeles and London, nixes fuel surcharges and other fees that FedEx and UPS place on its goods.

Amazon CFO Brian Olsavsky told analysts on Thursday that the retail giant will "continue to expand (its) Amazon logistics and (its) delivery capability" in 2019. He highlighted that in-house deliveries were also cheaper.

In 2018, Amazon expanded two-day shipping availability to "almost anywhere" in the US with its additional Amazon Air capacity. Free one-day shipping is now accessible for the "majority of Prime members in the US." Three more Amazon Air gateways are underway in Ohio, Illinois, and Texas.

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Source: Business Insider