Category: Industry News

Shares of United Parcel Service Inc and FedEx Corp fell on Thursday after a report that Amazon.com Inc was testing its own delivery service, potentially encroaching on the territory of the package delivery companies.

Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on its website and their delivery to customers’ homes – a function often handled by longtime partners UPS and FedEx, according to sources cited by Bloomberg.

UPS’ shares fell as much as 2 percent to $116.52, while those of FedEx dropped 1.6 percent to $217.77.

One of Atlanta-based United Parcel Service Inc.’s (NYSE: UPS) big retail customers – Amazon.com Inc. – will lease its own fleet of 767 cargo jets to move merchandise.

There has been a lot of talk that Amazon (Nasdaq: AMZN) might set up its own delivery service that would compete with UPS and FedEx.

Amazon says the new lease deal will compliment the company’s existing delivery network and ensure air cargo capacity to support one and two-day delivery for customers. Company officials also say the move is meant to reduce shipping costs.

Roughly 34,000 union members who work for United Parcel Service Inc and other logistics companies in New York will decide on Wednesday whether to accept deep pension cuts in what could be the start of a wave of benefit reductions to shore up union retirement plans.

If approved, pensions for retired teamsters from nine New York local unions will be cut 29 percent, which the plan’s trustees have said will lower the typical monthly benefit for a retiree with 30 years service to $3,550 from $5,000.

United Parcel Service Inc (UPS.N) and FedEx Corp (FDX.N) said they resumed flights at Houston’s main airport on Thursday afternoon and restarted some Texas operations crippled by Hurricane Harvey.

UPS (UPS.N), the world’s largest package delivery company, has restored service to more than 150 zip codes in Texas over the last 24 hours though operations remained at a standstill in storm-battered Houston and other Gulf Coast areas, UPS spokesman Matt O’Connor said. Trucks for both companies returned to deliveries on routes in Corpus Christi.

“The safety of our employees comes first and we will be resuming service as soon as it is safe to do so,” O’Connor said. “In Houston, that will come down to local areas that were impacted and how quickly water subsides.”