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Here's why Amazon won't be a threat to FedEx or UPS anytime soon

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Amazon CEO Jeff Bezos. The US company ranks as the world's No. 1 provider of cloud-computer services, but for how long?

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Despite recent reports suggesting that Amazon plans to build its own full-scale delivery network, financial-research firm Cowen & Co. doesn't believe that it'll be an immediate threat to any of the market incumbents like UPS or FedEx.

"We believe Amazon will continue to build their delivery network as a complement to UPS and FedEx and not as a replacement," Cowen analyst Helane Becker says in a note published on Monday.

Cowen's argument comes down to two factors: Amazon doesn't have the density and reach of UPS/FedEx, and retail customers will not want to switch over to a delivery service run by Amazon, which is typically their largest competitor.

Becker notes that Amazon's growing investment in this space, including its partial ownership of aircraft-leasing company ATSG, will...


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