For years, Amazon.com with its $1 billion dollar account is the biggest customer for United Parcel Service. However, since last year the relationship was under strain because of rising delivery cost. In the attempt to find alternative delivery route, Amazon acquired a delivery service to handle its delivery.
The cost of shipping have upsurged from 10.4% of the company's revenue to 11.7% in one year. The rise has been a concern for Amazon to reduce its reliance to UPS. Especially, during Christmas time, the busiest time for package delivery, UPS often delivered items late and that burdened Amazon to find an alternative route.
In searching of new delivery route, Amazon even plan to have drone delivering package to its customers, among any other things. The Seattle-based company now has its own trucks, drivers and fleet of couriers to deliver its package. It also have tried to lease a cargo airplane to reduce its shipping cost by building its own freight operations.
Amazon quietly purchased 25% share of Colis Privé, a French delivery service company in December. At the same time, according to Business Insider, the company also operated its own air freight service in Europe, leasing plane that flew from Germany to Poland to the UK repeatedly to deliver packages and parcels.
Amazon is expected to fully acquired Colis Privé sometime in the first quarter of this year. The company will acquire the remaining 75 percent of Colis Privé, making it fully owned by Amazon. However, the French company will continue its delivery service to its customers, not just Amazon.
A spokeperson of Colis Privé told LeFigarro the French newspaper and quoted by Seattle Times, "And it's out of the question for Colis Privé to only deliver for Amazon. The company will continue developing its commercial portfolio."
Prior to than acquisition of Colis Privé, Amazon had purchased 4.2 percent of Yodel, a United Kingdom parcel-delivery company in 2014. While last December, Amazon added thousands of trucks to its U.S. fleet to handle the growing load of packages delivery. It also negotiated the leasing of 20 Boeing 767 cargo jets for U.S. operation expansion.
After the purchase, Fortune reported that Amazon will slowly take over these delivery operations and relying less on the multinational shipping giants.
Furthermore, recent and previous moves from Amazon making some analyst predicted that Amazon will launch a worldwide package delivery service, competing with FedEx, DHL and UPS. Colin Sebastian, an analyst from Robert W. Baird & Co. believes Amazon may be developing a delivery service that meets more than its own shipping needs, he said, "They have the opportunity to disrupt this market and generate a lot of revenue."
Amazon will be a strong force in the delivery service, if prediction and analysis from the expert is corrrect. It will become a disruptive player in the global delivery service.
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