Skip to main content
  • Home
  • About
  • Faculty Experts
  • For The Media
  • ’Cuse Conversations Podcast
  • Topics
    • Alumni
    • Events
    • Faculty
    • Students
    • All Topics
  • Contact
  • Submit
Business & Economy
  • All News
  • Arts & Culture
  • Business & Economy
  • Campus & Community
  • Health & Society
  • Media, Law & Policy
  • STEM
  • Veterans
  • |
  • Alumni
  • The Peel
  • Athletics
Sections
  • All News
  • Arts & Culture
  • Business & Economy
  • Campus & Community
  • Health & Society
  • Media, Law & Policy
  • STEM
  • Veterans
  • |
  • Alumni
  • The Peel
  • Athletics
  • Home
  • About
  • Faculty Experts
  • For The Media
  • ’Cuse Conversations Podcast
  • Topics
    • Alumni
    • Events
    • Faculty
    • Students
    • All Topics
  • Contact
  • Submit
Business & Economy

On Amazon’s New Delivery Service: Don’t be surprised to see some significant shifts in global shipping

Tuesday, February 13, 2018, By Sawyer Kamman
Share
Whitman School of Management

Burak Kazaz, professor of supply chain management at Syracuse University’s Whitman School of Management reacts to news that Amazon is set to launch a delivery service that would compete with FedEx and UPS.

“In recent years, Amazon decided to develop its own logistic capabilities,” says Kazaz, the Steven Becker Professor of Supply Chain Management. “They built Prime Air and already have forty 767 jumbo airplanes that can move a lot of products, both between their fulfillment centers and to reach their customers. I would not be surprised to see more than one hundred 767 jumbo airplanes in Prime Air at the end of 2018. This is a significant investment in the firm’s logistical capabilities, one that would pose the type of threat mentioned to UPS and Fedex. These giant flying birds, when run efficiently, mean a significant transportation capacity.”

“Let’s talk about Amazon’s initiative on moving parcel for businesses and their newly advertised Shipped with Amazon (SWA)” say Kazaz. “Why would Amazon provide this service? It is important to understand the demand pattern for this online retailer. Quarter 4 is when the company has its highest logistical needs with Thanksgiving, Black Friday, and the holiday season. In the three remaining quarters, this transportation capacity might be at utilization rates less than ideal. SWA fulfills the need to make use of the unused capacity while providing the firm with the ability to serve its customers during high demand season, namely Quarter 4. If pricing reflects this reality, then Amazon’s new initiative sounds like creating efficiency in the utilization of this transportation capacity.”

Kazaz on analyst reports

“I certainly understand the concern that Amazon may not be asset heavy when evaluating its logistics network,” says the professor. “This is in alignment of the traditional perspective in analyzing financials of the transportation companies. However, we also need to be cognizant of the fact that we live in an era of light asset networks being much more valuable nowadays, at least in the way that Wall Street and investors see them. Take Airbnb, which does not own its accommodation facilities, but has the consumer demand and its value is extremely high in the financial market. The reason for the high valuation is that the firm has more leverage by keeping its cash and not making these long-term, and potentially risky, investments.”

“In addition to the transportation capacity in North America, Amazon can serve as a brokerage firm between shipping companies and businesses that need these shipping services. They have the technology who can develop such applications. I would not be surprised if Amazon takes this initiative seriously, and play a significant role in controlling the global shipping capacity,” says Kazaz.

“And, let me add that Amazon may not be the most efficient logistics provider early on with these initiatives. The company has proven to be a quick learner from its experiences as indicated from the missed deliveries in 2013. Given the history, I would not be surprised to see some significant shifts in the playing field with new equilibriums in the transportation services both in the US and in global services.”

Syracuse University faculty are available to speak to media via phone, email, Skype, or LTN studio. Please contact Scott McDowell, executive director, regional strategic communications at semcdowe@syr.edu or 929.351.5887 or Ellen James Mbuqe, director of news and PR at Syracuse University, at ejmbuqe@syr.edu or 315.443.1897.

  • Author
  • Faculty Experts

Sawyer Kamman

  • Burak Kazaz

  • Recent
  • Syracuse University Press Participating in Path to Open Program
    Friday, September 29, 2023, By Cristina Hatem
  • A&S Chemistry Professor Receives Award From the American Chemical Society
    Friday, September 29, 2023, By News Staff
  • ‘Guys and Dolls’ Opens Syracuse University Department of Drama 2023/24 Season
    Friday, September 29, 2023, By Joanna Penalva
  • Libraries Add MindSpa Wellness Rooms
    Friday, September 29, 2023, By Cristina Hatem
  • iSchool Professors, Students Honored With ALISE Awards
    Friday, September 29, 2023, By Anya Woods

More In Business & Economy

Whitman School of Management Climbs in Bloomberg Businessweek Rankings

The Martin J. Whitman School of Management has again been listed among the best MBA programs for 2023-24 in the U.S. by Bloomberg Businessweek, improving its ranking by seven spots to No. 61 nationally, up from  No. 68 last year….

Falk College, UNLV to Launch Sports, Entertainment and Innovation Conference Next Summer

On July 14, University of Nevada Las Vegas (UNLV) Sports Innovation and Syracuse University’s David B. Falk College of Sport and Human Dynamics, in collaboration with the Las Vegas-based guest experience agency Circle, proudly announced the launch of a first-of-it-kind Sports,…

Syracuse University to Offer Google’s New Cybersecurity Certificate

Syracuse University’s College of Professional Studies today announced it will offer Google’s new Cybersecurity Certificate. The Google Career Certificates prepare learners for in-demand fields including cybersecurity, data analytics, IT support, project management and UX design—with no experience required. This offering…

Whitman School Announces Panasci Local Leadership Initiative

The Martin J. Whitman School of Management announces the creation of the Panasci Local Leadership Initiative, which will support professional connections and career building for students to remain in Central New York beyond graduation. This new initiative is made possible…

College of Professional Studies Faculty Member Co-Authors Project Management Textbook

Arthur Thomas, Ph.D., executive director for the Office of Professional Acceleration and Microcredentials in the College of Professional Studies, co-authored the textbook “Certified Associate in Project Management (CAPM) Exam Official Cert Guide Premium Edition and Practice Test” with Vijay Kanabar…

Subscribe to SU Today

If you need help with your subscription, contact sunews@syr.edu.

Connect With Us

  • X
  • Facebook
  • Instagram
  • Youtube
  • LinkedIn
Social Media Directory

For the Media

Find an Expert Follow @SyracuseUNews
  • Facebook
  • Instagram
  • Youtube
  • LinkedIn
  • @SyracuseU
  • @SyracuseUNews
  • @SUCampus
  • Social Media Directory
  • Accessibility
  • Privacy
  • Campus Status
  • Syracuse.edu
© 2023 Syracuse University News. All Rights Reserved.