- UPSCEO David Abney has long said that Amazon is just a customer.
- In an interview on Thursday with Business Insider, however, he changed his tone.
- "It is a combination," Abney told Business Insider. "We monitor them as is if they were a competitor."
UPSCEO David Abney has long hewn to the narrative that Amazon is just another client of the shipping giant.
In an interview on Thursday with Business Insider, Abney echoed much of what he has said in the past and what UPS' shipping competitor FedEx has also said.
"We have a mutual and beneficial relationship," Abney told Business Insider. "We're selective in what packages that we take from Amazon and they do the same thing, and we have found where we have the best value."
Then, for perhaps the first time publicly, Abney made an important acknowledgment.
"We no longer live in a day where we classify people as customers or competitors," Abney said. "It is a combination. We monitor them as is if they were a competitor."
About 10% of UPS' revenue comes from Amazon, the Cowen managing director and senior research analyst Helane Becker told Business Insider. Roughly half of all e-commerce sales went through Amazon in 2018, according to eMarketer estimates.
Reports on Amazon signify that the e-commerce juggernaut is interested in significantly expanding its logistics business. Morgan Stanley analysts have said Amazon is on track to have 100 planes by 2025, which does pale in comparison with UPS' chartered or owned fleet of more than 500 cargo aircraft. In the past year, Amazon shipped nearly 4.7 million containers of goods from China to the US in ocean freighters.
Signs are also showing that Amazon is interested in shipping for others and not just developing an in-house delivery program.
Last week, the company expanded its Amazon Shipping home-delivery service to the New York area. The service nixes weekend fees, fuel surcharges, and other fees that FedEx and UPS place on its goods. (Some of these fees, however, like fuel charges, would be complicated to completely nix as they're dependent on factors that neither Amazon nor UPS and FedEx can control.)
Abney underlined that, despite these moves, UPS is a global transportation leader. On Thursday, UPS announced it shipped a record number of packages during the 2018 peak season.
"The scale that we offer, the value that we offer, and the density that we have, we just believe that it's more competitive than what any individual company would be able to offer," Abney said.