At the beginning of this year, FedEx announced the launch of a "commerce platform" in the third quarter, which feels akin to Hanjin in Korea suddenly announcing the creation of something like Coupang. Consequently, foreign media have continued to report on this development with headlines suggesting that FedEx is starting a commerce platform to directly compete with Amazon, questioning whether it can truly compete with Amazon. However, when we discuss FedEx's commerce platform, named fdx, it's apparent that it's not quite like Amazon.
Considering the history of conflict between FedEx and Amazon, the reporting behavior of these foreign media outlets is not incomprehensible. Amazon first made a move into the "last mile delivery" sector, which had been cooperated with FedEx, launching a direct competition. Furthermore, by 2023, Amazon had surpassed not only FedEx but also UPS, becoming the leading delivery company in the United States.
Upon examining the main features of fdx as outlined by FedEx, it seems more like a "logistics platform" than a commerce platform, given the numerous features related to logistics operations support. It might be that FedEx was actually more interested in creating a logistics platform.
Nonetheless, there are reasons to consider fdx as a "commerce platform." This is primarily because the first feature emphasized by fdx is "creating consumer demand." For a logistics company like FedEx, creating consumer demand is an entirely different capability, requiring effective marketing or a commerce platform to engage customers directly. How does FedEx plan to achieve this? Over the past few years, FedEx has been preparing a big picture strategy, indicating that the direction pursued by FedEx's commerce platform is different from Amazon's commerce platform.
● The ball Amazon launched: 'Last Mile Delivery'
Following UPS, FedEx, the second-largest last-mile logistics provider in the United States, announced at the beginning of this year that it would create a new data-driven commerce platform. In a way, this news might sound similar to Hanjin in Korea suddenly launching something like Coupang.
However, FedEx has been feeling a sense of crisis in the e-commerce field for quite some time, and Amazon symbolizes that crisis. Unlike Coupang in Korea, Amazon initially did not internalize its delivery organization but cooperated with logistics companies like FedEx. Entering the 2010s, it began expanding its delivery business by acquiring local courier services. In 2018, Amazon officially declared the last-mile delivery sector as a fiercely competitive business through official documents. In response, FedEx terminated its logistics service contract with Amazon in 2019.
Even then, the industry's assessment of Amazon, which was expanding its territory to all logistics, was lukewarm. Below is an excerpt from an expert interview published when Amazon was reported to be actively expanding its delivery services in 2018. The content primarily focused on the challenges Amazon would face in creating efficiency through its delivery system and directly competing with logistics companies like FedEx.
"It's a far-off story for Amazon to have the capacity to handle all its own deliveries. It's actually impractical to start competing with UPS and FedEx." - Scott Group, analyst at Wolfe Research, 2018 WSJ
"Logistics is too big of a business. Just because Amazon creates a new logistics option, it doesn't mean FedEx or UPS will be immediately scared." - Paul Thompson, Chairman of Transportation Insight, 2018 WSJ