The UPS bill, however, is not quite so welcome. It is like the hangover after New Years Eve.
The stuff we sell is heavy, and expensive to ship. UPS prices fluctuate, based on fuel prices, but, in truth, they move only one direction. Up!
That is why we are closely following the discussion regarding the possibility the Amazon will roll out a “same day” delivery service in select markets. This would mean that Amazon would develop its own infrastructure (trucks, terminals, drivers, etc.) and actually deliver products themselves.
Between the continued decline of the Post Office and the failure of Fed Ex Ground to gain any real traction, UPS has no strong competition and no good reason to hold down prices.
Amazon could change that. Every day it appears to us that more of what we see on the UPS delivery truck is from Amazon. If Amazon was able to take even a small percentage of that business back from UPS, it might get everybody’s attention.
Amazon knows how to manage infrastructure. Their warehousing and shipping operations have no peer, and they might well be able to take the next step in getting products into the hands of their customers.
While it is unlikely that they would ever have a nationwide distribution system, just offering their own delivery service in major markets could have a real impact on the delivery business.
We wish them luck.