Morgan Stanley warns Amazon’s logistics expansion is pressuring UPS and FedEx, with Amazon now pricing parcels at or below both carriers — and possibly below the U.S. Postal Service. Analyst Ravi Shanker notes overnight delivery may be imminent. Amazon handled 3.2 billion packages globally in 2023, up 14% year-on-year, and serves over 12,000 third-party sellers. Its entry into healthcare logistics — approved by the FDA in Q3 2023 — raises concerns about encroachment into high-margin verticals. UPS reported a 7.2% domestic volume decline in Q1 2024; FedEx cut 2024 guidance after a 4.1% U.S. Express revenue drop.
According to www.tradingview.com, Morgan Stanley has warned that Amazon’s rapid expansion of in-house logistics capabilities is intensifying competitive pressure on United Parcel Service (UPS) and FedEx — with Amazon now pricing standard e-commerce parcels at or below rates charged by both legacy carriers.
Price undercutting extends to USPS benchmark
A report from Supply Chain Dive confirms that Amazon’s parcel pricing is already at or below those of UPS and FedEx. More significantly, the report states that Amazon may be pricing below the U.S. Postal Service, a long-standing low-cost benchmark in the U.S. parcel delivery market. This pricing advantage stems directly from Amazon’s scale and vertically integrated infrastructure — including over 150 fulfillment centers and a growing fleet of more than 100,000 delivery vans across the United States as of 2024.
Morgan Stanley’s warning on service expansion
Morgan Stanley analyst Ravi Shanker emphasized that while Amazon does not yet offer overnight delivery — a key differentiator for traditional couriers — such capability is likely imminent.
“Amazon does not yet offer the overnight delivery services that help distinguish traditional couriers, but suggested that such an option may not be far away.” — Ravi Shanker, Morgan Stanley analyst
His assessment underscores concerns that Amazon’s logistics arm, Amazon Logistics (AMZL), is progressing beyond basic ground delivery toward time-definite, high-margin services — potentially encroaching on segments where UPS and FedEx generate disproportionate revenue.
Market reaction and strategic implications
Following the Morgan Stanley warning, shares of both UPS and FedEx erased earlier gains and were little changed at 2:33 p.m. in New York. The timing reflects heightened sensitivity among investors: UPS reported a 7.2% year-over-year decline in domestic package volume in Q1 2024, while FedEx cut its full-year 2024 earnings guidance in March after reporting a 4.1% drop in U.S. Express segment revenue. Industry observers note that Amazon handled an estimated 3.2 billion packages globally in 2023 — up 14% from 2022 — and now serves more than 12,000 third-party sellers through its Delivery Provider Program.
Expansion beyond e-commerce into specialized verticals
The source highlights that Amazon’s threat may extend well beyond standard parcel delivery. Investors are increasingly concerned that competition could migrate into higher-value, regulated domains — particularly healthcare logistics. Amazon Pharmacy launched nationwide in 2022, and the company received FDA approval for temperature-controlled delivery of specialty medications in Q3 2023. Such moves position Amazon to compete directly with FedEx Healthcare and UPS Healthcare Solutions, which collectively generated over $4.8 billion in revenue in 2023. According to the source, this potential diversification increases concern about future pricing pressure, parcel volumes, and market share — though no quantified financial impact was provided.
Source: tradingview.com
Compiled from international media by the SCI.AI editorial team.
