Why Chesapeake, Wal-Mart Stores, Amazon, UPS, and FedEx Are in Spotlight Today

Amazon.com, Inc. (NASDAQ:AMZN) is in the spotlight after The Wall Street Journal reported that the company is planning to eventually build a logistics package delivery operation both for itself and for other retailers. In the effort termed’ Consume the City’, Amazon hopes to offer delivery options to consumers and companies that current logistics providers don’t offer such as more delivery times. Therefore, Amazon intends to increase its efficiency and the total market size of the logistics business is very attractive for a company as big as Amazon. According to the financial firm Baird, the world-wide delivery market generates around $400 billion in annual sales for various companies, with FedEx Corporation (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS) leading the list. Although Amazon won’t be a threat to the two in the short term, the e-commerce giant will certainly be a long-term threat to both FedEx and UPS given Amazon’s long term thinking and its extensive financial resources.

Amazon, for its part, has insisted that its operations are just a supplement to existing providers:

“We are very happy to have the delivery capacity our carrier partners can provide. They provide a high quality service, and our own delivery efforts are needed to supplement that capacity rather than replace it.”

However, according to the Journal, executives are being a little bit more ambitious, ‘describing the company as building a full-service logistics and transportation network effectively from the ground up’. Amazon.com, Inc. (NASDAQ:AMZN) was one of the most popular stocks among the funds we track, with 145 funds reporting stakes as of the end of June. Meanwhile, 33 funds held shares of United Parcel Service, Inc. (NYSE:UPS) and 46 funds were long FedEx Corporation (NYSE:FDX) at the end of the second quarter.

Disclosure: None