Morgan Stanley sees FedEx and UPS suffering in market with Amazon Air
A report from global investment bank Morgan Stanley has stated that major forwarders such as FedEx and UPS are under serious threat from Amazon’s move into freight forwarding.
Morgan Stanley analyst Ravi Shanker said: "We think the market is missing the risk Amazon Air poses to UPS/FDX growth," after FedEx was down nearly 7% and UPS tumbled 7.7% recently.
The recent insights into Amazon’s new operations mean Morgan Stanley has cut UPS's price to $87 from $92, and FedEx’s to $230 from $240.
With Amazon making moves into shipping, air freight and freight forwarding, it’s clear the US giant wants to create its own end-to-end operation.
While that may be its grand vision, it is unlikely it would pass the antitrust regulations required in order to carry out such a scheme.
Amazon is presently awaiting delivery of 40 planes, and also plans to build a shipping hub that could handle 100 jets.
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