Amazon has inked major agreements with at least 12 postal operators globally to fulfill its growing shipping demands, finds a new report this week from Cargo Facts Consulting.
E-commerce traffic has been good for volume and revenue growth in parcel business units for the world’s largest postal companies. Likewise, when sourcing delivery capacity for its expansive e-commerce business, Seattle-based e-tail giant Amazon still relies heavily on postal companies for deliveries, despite its growing insourced logistics network.
Amazon’s estimated spend with the United States Postal Service in 2018 reached about $5.8 billion in 2018, or about 8.3% of its total revenue – much higher than Amazon’s $906 million estimated spend with FedEx that year. Overall, Amazon’s 2018 shipping bill came in at about $27.7 billion.
Given that Amazon’s dedicated European air network is much smaller than its U.S. operations, postal companies outside the U.S. aiming to cash in on Amazon’s shipping budget have a major advantage that has materialized in several agreements. Postal companies with joint ventures or agreements with Amazon include: the USPS, Canada Post, Correos de Mexico, Brazil’s Correios, the U.K.’s Royal Mail, France’s La Poste, Deutsche Post, Poste Italiane, Spain’s Correos, Turkish Post, India Post and Japan Post.
Other key takeaways from the report include:
- Postal companies risk getting cut out of crucial e-commerce business
- E-commerce fulfillment costs are rising faster than revenue
For more on the report or to purchase the Global E-Commerce Logistics Outlook, visit CFCInsights.com.