It seems that Amazon isn’t content with just being an e-commerce behemoth, consumer electronics producer, streaming content site, and the world’s largest provider of cloud infrastructure services, it also wants to become a shipping giant that can compete with the likes of UPS and FedEx.
Jeff Bezos’ company already owns 25 percent of shipping firm Colis Privé, and is expected to buy the remaining 75 percent later this year. While the French company’s size may not come close to the likes of multinationals such as UPS, the acquisition represents Amazon’s biggest hint to date that it intends to start delivering its own goods, as well as packages from other companies.
A spokesperson for Colis Privé said that Amazon would continue to operate it as a separate business and that the company would keep on shipping packages on behalf of all e-commerce customers, not just Amazon. But Amazon hasn’t said what its long-term plans are for Colis Prive, and analysts believe that this is another move from the online giant in preparation for entering the shipping business.
Amazon acquired the right to purchase 4.2 percent of UK parcel company Yodel in 2014, and has recently added thousands of trailers to its fleet in order to meet increasing demand. In November, the company was reported to be behind a secretive air cargo operation codenamed “Aerosmith” that was conducting flights to and from Wilmington Air Park with airports in Allentown, Pennsylvania; Ontario, Canada; Tampa, Florida and Oakland, California.
UPS and FedEx have struggled to keep up with delivery demands caused by the ever-increasing growth of online shopping. In the past, both companies have failed to deliver goods during the holiday season.
Amazon spends a huge amount of money on shipping costs - $3.2 billion in the third quarter of 2015 – and the company wants to cut this cost by using its own shipping network. Amazon knows it could make money from this service by offering it to others, much like it did with Amazon Web Services.
There is, of course, a very long way to go before Amazon is in direct competition with the US delivery companies it relies on today, but this acquisition marks a big step toward that goal.