Amazon.com, Inc (NASDAQ:AMZN) has been striving to beat both FedEx Corporation (NYSE:FDX) and the United Parcel Service, Inc (NYSE:UPS) in the logistics business. The retailer may succeed in this regard, considering the heavy investments it continues to make in logistics. The company remains to be a close business associate
Amazon also provides third-party seller services to other businesses. It cuts a small fraction of the sales as compensation for the services it delivers. The company also admits that it benefits from the fees it receives from sellers that utilize its warehouses.
The company wants to enhance its service delivery through its heavy investments, which it believes will help win the online delivery race. Analysts who checked out the company’s first-quarter earnings report recognize its determination to rise and take the top slot in logistics.
Olsavsky speaks out about the changes
Amazon CFO Brian Olsavsky discloses that Amazon increased its capital expenditures by a significant margin. The company invested more in its data centers and logistics expansion over the past 12 months. Olsavsky estimates that Amazon boosted its spending in this regard by about 80%.
The outbreak of the deadly Coronavirus pushed most businesses to the edge, and they cut their expenditures significantly. Surprisingly, Amazon didn’t seem deterred by the happenings and thus continued to boost its spending towards development in the area of logistics and other segments. Olsavsky reveals how Amazon kept using its plowed-back profits in progressive and deals, utterly oblivious of the Covid-19 wave.
Amazon seems impressed by the significant changes it has made to promote its transportation and logistics presence. It has also achieved a lot in terms of its physical expansion moves.
Olsavsky applauds the company for increasing its fleet of airplanes and the addition of more warehouses. He also seems happy with the addition of the company’s linehaul trucks.
The growth of Amazon’s contracted delivery network happens to be the other distinguishable move. The company’s blue branded vans continue helping monitor about 100,000 drivers for better service delivery.
Amazon’s heavy investments in logistics will enable deliveries to reach product consumers in time. Amazon also hopes to achieve more in package deliveries.