From a June 3rd article in Lloyds Loading List, the article below about Amazon’s plans in the logistics and transport space.

Essentially, Jeff Bezos is saying that Amazon wishes to maintain much of the status quo in terms of their relationship with the main carrier/integrators – but that at the same time that they wish to control some transport capacity during peak periods.   There is so much going on here – on one hand he is saying to investors that Amazon is keeping its head and isn’t venturing into territory that will disrupt its profit-making business model, for now.  On another hand, he is saying that he sees a friendly-ish balance in the relationship with the likes of FedEx, UPS, DHL and others. He needs them (for now) and he wants to hold more cards in the pricing/leverage balance.  All I would note is that he who owns the demand has all of the power – and would offer that Amazon would have little reason to not wade deeper and deeper into the swimming pool that is transportation and logistics.  The ecommerce model will increasingly have end-customers demand faster deliveries and in the end, the likes of Amazon and Alibaba are more logistics companies than anything else.

Amazon’s designs on the logistics world may not be as grand as some delivery companies believe, The Wall St Journal (WSJ) reports, quoting recent comments by the online retail giant’s chief, Jeff Bezos.

Speaking at a conference hosted by technology website Recode. earlier this week, Bezos indicated that Amazon wasn’t aiming to take over the last mile of delivery from the likes of FedEx, United Parcel Service or the US Postal Service but rather to “supplement it heavily,”  the newspaper highlighted.

This was necessary for peak selling seasons ahead of the major gift-giving holiday in the countries in which Amazon operates, he said.

The WSJ also quoted Bezos as saying that for now, Amazon was building its business with UPS and the (US) Postal Service and as to what could keep that up, he replied: “Better prices.”

The WSJ mused that keeping up with peak demand will undoubtedly be an expensive proposition for Amazon, involving the building of more fulfillment centers and possibly even the launch of delivery drones.

“But that is nothing compared with what it would cost to completely supplant traditional shippers. FedEx reported more than $4.3 billion in capital expenditures in its most recent fiscal year, roughly the same as Amazon. That should cause investors to breathe a sigh of relief,” it argued.

“Granted, FedEx and UPS boast higher return on equity than Amazon. But a long-time bull argument for the e-commerce giant has been its ability to pare back its investment once it has become sufficiently dominant in a market, effectively flipping a switch to achieve profitability.”

It concluded: “The day of major windfall has yet to arrive for the company’s retail business, but Amazon has been steadily profitable for the first time in years over the past four quarters as its higher-margin cloud services business continues to grow. Attempting to become the next FedEx and to dominate that market as it has tried to do with so many others – could quickly cause those green shoots of profitability to wither and die. For investors, Amazon’s shipping restraint may be a welcome delivery.”