Amazon's Foray into the Courier Aviation Market: Challenging the Dominance of UPS and Fedex

Amazon is accelerating its entry into the express air delivery market, planning to lower prices in competition with UPS and FedEx. The company aims to expand its services across the United States within the next year.
Amazon's Foray into the Courier Aviation Market: Challenging the Dominance of UPS and Fedex

As the Spring Festival travel season approaches, the aviation market enters its busiest period. Against the backdrop of rapidly growing e-commerce business, surging demand for package delivery is driving increased need for air cargo services, prompting multiple courier companies to establish aviation operations.

In the United States, Amazon is accelerating its logistics expansion, positioning itself to compete with traditional shipping giants UPS and FedEx. According to overseas media reports, Amazon will launch a pilot delivery program in Los Angeles, partnering with third-party merchants on its platform with plans to expand nationwide within a year.

Sources indicate Amazon is competing with UPS and FedEx through lower pricing, though specific rate structures remain undisclosed. The company previously tested its delivery service in London, handling business packages through to final customer delivery.

While UPS and FedEx remain crucial Amazon partners, industry observers anticipate competition from the e-commerce leader as it builds independent logistics capabilities to optimize "last mile" delivery efficiency. Supply chain consultants report Amazon has largely completed construction of its transportation network over the past three years.

By late 2016, Amazon had established approximately 70 package drop-off locations across 21 U.S. states. Citigroup analysis shows that while average shipping costs through UPS and FedEx run $7.81 per package, Amazon's self-built logistics system could save $3 or more per item—potentially reducing annual expenses by about $1.1 billion.

To further develop its delivery infrastructure, Amazon has installed specialized locker systems in apartment building mailrooms nationwide and created secure entry systems allowing couriers to deliver packages inside customers' homes. Over the past two years, the company has aggressively built its own parcel network, including establishing an air cargo hub and leasing up to 40 aircraft.

Last year, Amazon announced a $1.5 billion investment in a Kentucky freight hub to meet growing air transport demands. The company also plans drone delivery operations, creating a comprehensive transportation system integrating road, air, and sea networks to reduce reliance on traditional carriers.

Reuters data shows Amazon has deployed cargo planes at at least 10 U.S. airports, primarily for lightweight shipments. While UPS and FedEx maintain decades-old nationwide networks, it remains uncertain whether Amazon can disrupt the air freight sector. What's undeniable is that more packages will soon travel via dedicated cargo aircraft, making nighttime skies busier with delivery routes.