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Falling Stocks May Be the Least of UPS and FedEx’s Worries

FedEx
Photo Credit: BriYYZ via Flickr cc

Tuesday was a bad day for transportation stocks as the Dow Jones Transportation Average fell 4.4%, the biggest drop since 2016. But according to Morgan Stanley analyst Ravi Shanker, things could get worse for companies such as UPS and FedEx as Amazon continues to bulk up its private air freight delivery service, Amazon Air, whose routes could overlap with over two thirds of UPS and FedEx’s business.

There’s a simple reason why Amazon will want to handle more of its own air deliveries. According to Shanker, Amazon could save between $1 billion and $2 billion next year. That works out to about 3% to 6% of its global shipping costs.

Read the full story at CNN.