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Amazon Predicts It Will Pass UPS and Fedex as Biggest U.S. Shipper

To deal with supply chain disruption, Amazon is using its own trucks and planes and shipping goods to new ports, it said.
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Amazon  (AMZN) - Get Amazon.com, Inc. Report predicts that by early next year it will overtake industry titans UPS  (UPS) - Get United Parcel Service, Inc. Class B Report and FedEx  (FDX) - Get FedEx Corporation Report as the biggest U.S. package delivery service.

“We expect we will be one of the largest carriers in the world by the end of this year,” Dave Clark, chief executive of Amazon’s worldwide consumer business, told CNBC.

“I think we’ll probably be the largest package delivery carrier in the U.S. by the time we get to the end of the year, if not in early 2022.”

To deal with the supply-chain disruption caused by the Covid pandemic, Amazon is using its own trucks and planes and shipping goods to new ports to circumvent the gridlock, Clark said.

“These things don’t happen overnight,” Clark said. “We’ve been building the logistics infrastructure, the technology platform that drives it, for two decades now. So we walked into the pandemic in a really good place.”

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Amazon recently traded at $3,578, up 2%. It has gained 9% so far this year, trailing the S&P 500’s 24% climb amid valuation concern.

Morningstar analyst Dan Romanoff likes Amazon, though he sees short-term issues.

“We are lowering our fair value estimate for wide-moat Amazon to $4,100 per share from $4,200, based mainly on margin pressures arising from hiring and shipping challenges,” he wrote last month.

“Amazon remains well positioned to prosper from the secular shift toward e-commerce and the public cloud over the next decade, but we do see a modest reset in terms of growth and profitability through the next several quarters.”

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