Morgan Stanley: Amazon Logistics Expansion Threatens UPS, FedEx

A Morgan Stanley analyst warned that Amazon's (AMZN) expansion of low-cost delivery services could increase competitive pressure on both UPS (UPS) and FedEx (FDX), noting that Amazon may add overnight shipping in the future.

Rating Change

The analyst did not change his rating on UPS, FDX, or AMZN shares, but emphasized that competitive risks are rising.

Analyst's Rationale

The analyst believes Amazon continues to build its internal logistics network aggressively, reducing its reliance on traditional shipping companies. With lower delivery costs, Amazon could offer faster and cheaper services, threatening UPS and FedEx market share.

Context

The warning comes after Amazon invested billions in distribution centers, aircraft, and trucks. In response, UPS and FedEx have announced cost-cutting and efficiency plans. UPS shares fell 2% in recent trading, while FDX dropped 1.5%.

Conclusion

While the analyst sees Amazon's expansion as a real threat, UPS and FedEx still have extensive global networks and strong relationships with commercial clients. Investors should monitor sector developments closely.