UPS may lose an important customer

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UPS may lose an important customer

By Louisa Hallett - 09/21/2018
UPS may want to worry about Amazon’s updated 20,000 van last-mile plan.

UPS may want to worry about Amazon’s updated 20,000 van last-mile plan.

According to CNBC, Last week brought the news that Amazon.com Inc. had ordered 20,000 delivery vans from Mercedes-Benz. This deal is a big leap from the Seattle-based e-commerce company's first order of 5,000 vans. Amazon will lease these to third-party partners, who will operate them for last-mile delivery — basically, getting packages from a shipping hub to your house.

With so many people interested in assisting Amazon with its own last-mile solution, UPS may be losing one of its most important customers. According to CNBC, UPS acknowledged in its "risk factors" section of its annual report that "changes in our relationships with our significant customers, including the loss or reduction in business from one or more of them, could have an adverse impact on us."

This is yet another step in Amazon's plans to build its own delivery service, and it's worth watching to see how it will affect United Parcel Service Inc. according to CNBC. Amazon also is allowing people to use their personal vehicles for delivery in some cities.

Although not identifying Amazon specifically  it says some of its large customers might account for a relatively significant portion of revenue growth and — in talking about risk to its own business — even speculates that these customers could take their volume elsewhere, demand lower prices or develop their own shipping and distribution capabilities, according to CNBC.

In July, Amazon announced it’s last-mile solution plan by recruiting people interested in launching small delivery companies that would work for Amazon, moving packages from fulfillment centers to doorsteps. The company now says tens of thousands of people nationwide have applied for the "Delivery Service Partners," including veterans, families and a former NFL player that Amazon declined to name.

To read the full CNBC report, click here.