UPS & FedEx should now put most of their remaining budget in transportation innovation.

It's now or never.

Image by Midjourney

TLDR;

Amazon has just become the biggest delivery business in the US.

🌐 Amazon: Cloud, eCommerce, and Delivery Market Dominance.

📉 Growth Lesson: Never Stopping at Obstacles

🔮 The Vision Quest Continues: Faster, Faster, Faster

🦖 UPS & FedEx: The Dinosaur Dilemma

💸 Investing in Transportation: The Survival Route

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🌐 Amazon: Cloud, eCommerce, and Delivery Market Dominance.

Amazon went from asking UPS and FedEx nicely for deliveries to building a delivery empire. Now, Amazon is the biggest delivery business in the US.

Accidentally, Amazon's quest for reliable deliveries created Amazon Air. Now, they're not just delivering on time; they’re almost self-sufficient. "Who needs UPS when you can be UPS on steroids?"

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📉 Growth Lesson: Never Stopping at Obstacles

I’d say that a key takeaway from this tale is Amazon's refusal to settle. They could've nagged UPS and FedEx to up their game, but no! They bought their own planes.

You might think they did that because they had a deep pocket. But the truth is that others with deep pockets usually stick to the easy route, but not Amazon.

Amazon's dominance isn’t about the thrill of package delivery. It's about a global e-commerce vision. "If it's not on Amazon, does it even exist?"

I’d say that Bezos’s desire to create the everything store that exists everywhere and delivers as soon as possible is being achieved.

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🔮 The Vision Quest Continues: Faster, Faster, Faster

To the world, fast meant days. To Bezos, it meant hours. But Amazon made it happen. "Speeding up the world, one Prime delivery at a time."

But it’s not only Bezos. Everyone knows that you need to put your hands on the wheel. You can’t rely on a UPS or FedEx for an important part of your business.

Let’s take another totally random example that I’ve never talked about before. Hmm, I don’t know, AI, for example?

Each tech giant plays their game with their own AI.

• Amazon plays with Anthropic's Claude, while building their own "Olympus."

• Meta uses Llama 2

• Google uses Palm 2

• Microsoft uses OpenAI’s GPT.

• Apple uses “ajax”

The lesson? "Build your own FedEx; don't let others control your destiny,"

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🦖 UPS & FedEx: The Dinosaur Dilemma

While some eye the B2C cake, the real feast is in B2B. "You need to keep those business deliveries in-house."

For each B2C dollar made from delivery, a ton is made from the B2B line. Businesses are sending more packages than you. It’s that simple.

Once Amazon cut ties (which is happening slowly), UPS and FedEx face extinction. They already lost in the B2B battlefield. They might still be in the B2C game. But those are breadcrumbs compared to B2B.

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💸 Investing in Transportation: The Survival Route

I see a narrow possibility of UPS or FedEx not becoming the next Nokia. It’s a long shot, but the only way they could get back into the B2B game is:

• Get into eCommerce. But that’s like planting a tree in a 200-acre forest.

• Get back Amazon as a client.

Why would Amazon sign them up? They have the best option at the moment.

I’d say investing in transportation R&D so that Amazon doesn’t have the “best” option is a strategy. You’ll need to “out-innovate” Amazon. But only in a particular sector where UPS and FedEx have been operating for years.

It’s time to let go of the dinosaurs and get those drone engineers in the game. It’s an impossible task, but it’s the only one they’ve got.

The only way to lure Amazon back is by changing their delivery “hours” timeframe to “minutes.”