Amazon may not impact trucking much, but will hurt UPS and FedEx.
Amazon is starting to impact airfreight but make only small inroads to ground truckload transportation. It has already bought 4000 trailers – suggesting it is tendering 1-2000 loads per day…not earth shattering. Airfreight is a different story – Amazon has chosen Cincinnati airport to be its air hub…right next to DHL which brings a lot of Amazon stuff in from overseas. The size of the facility – 2MM sq. ft. is 35% the size of UPS’s hub – but really significant for one supplier. Meanwhile, UPS is seeing volume up but profits down…UPS’s CEO said “We have to put more emphasis on making sure that we pass on to our customers the increase in costs that e-commerce deliveries can bring.” Meaning delivery to the home is more expensive than the UPS price differential between B to B and B to C suggests.
The Wall Street Journal reports that bullish bets (bets that the price will go up) on oil rose to a record in January, reflecting widespread optimism that crude prices will move higher as OPEC starts cutting production in a bid to ease a global supply glut.