Amazon now delivers more than 50% of all its orders in the US, according to an estimate from Morgan Stanley reported by CNBC. This a huge improvement from its numbers in recent years. It also means Amazon is accelerating its winning in its bid to own the entire logistics chain and severe its relationship with logistics companies like FedEx and UPS.

If the current rate is sustained, Amazon should pass both FedEx and UPS in US package volume.   The company is currently delivering 2.5 billion packages per year in contrast to FedEx’s 3 billion and UPS’s 4.7 billion, Morgan Stanley reports. Amazon has doubled its number in just the last year alone, fulfilling about 20 percent of all of its own deliveries to about half. Amazon’s new one-day Prime shipping initiative, which kicked off earlier this year is a huge contributing factor.

CEO Jeff Bezos speaking of one-day Prime shipping on an earnings call in October:

“Customers love the transition of Prime from two days to one day. They’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.”

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Amazon To Become More Efficient

Earlier in 2019, Amazon and FedEx ended their contracts for ground shipping and air transport. The company still uses UPS, however, it’s also been building a network of its own delivery drivers under the Amazon Flex platform. The Flex platform being a seemingly similar type of on-demand contract network to Uber.

Amazon has said in October 2019, that from June to September 2019, it spent 50 percent more. This in figures would mean a staggering  $9.6 billion on fulfillment of orders alone. However, this seems like a worthwhile expenditure if it succeeds in controlling the entire delivery chain from start to finish.

In the future, on the right scale, that would start saving Amazon money and allow it to become even more efficient at delivering products.

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