UPS’s CEO claimed on an investor call today (25 April) that Amazon in-sourcing aspects of its logistics had not decreased volumes for the delivery company.
In a conference call for the company’s Q1 2019 results, David Abney said UPS still had a “mutually beneficial relationship” with Amazon and the company would continue to focus on “serving [Amazon’s] needs”.
However, Abney said “there’s so much more to ecommerce than Amazon”, highlighting how the company is expanding its work with smaller ecommerce businesses.
“It’s a continued focus on improving revenue quality”.
The shipping giant announced revenue of $17.2 billion for the quarter, up only 0.2% from last year. Abney said that investment in transforming the business would increase UPS’s “long-term earnings power”.
Increasing insourcing activity by Amazon has led to speculation not only that UPS and FedEx shipment volumes might be impacted but also that the marketplace might compete with them as a supplier of shipping services.
For example, in December, Amazon announced it was leasing an additional 10 aircraft to support the growth of its Prime service.
UPS claimed earlier this year that nearly 80% of packages will be going through facilities using automation by the end of 2019. On its Q4 call with investors, UPS chief information and engineering officer Juan Perez said the company will add 20 new automated facilities in 2019, bringing a further 40,000 packages per hour of capacity online.
