Amazon enters LTL

Picked up a load in SLC the other day, and a Amazon contract truck came in said he was picking up for Amazon.. well he was in the wrong building apparently... but I thought that was interesting Amazon was doing p&d . I always thought they went warehouse to warehouse only

 

Alright, I'll bite.

It's not good.

Amazon is a conglomerate. A monopolistic one, I'll explain.
The entire behemoth did $638b in sales last year, of which $59b went into the kitty as net income.
Its businesses include online retail, Whole Foods, online ads, Prime streaming, IMDB, Twitch, Ring, logistics, hardware (Kindle, etc), Amazon Web Services, and others.

Most of these businesses were at one point- or still are- unprofitable. So how does Amazon survive?

Two reasons.

One- we're in an era of such rampant speculation, wealth, and de-regulation that Wall St does not reward the stocks of profitable companies. It rewards the stocks with the promise to become profitable in the future. And that is key- once a company becomes profitable, it's multiple contracts. And the more profitable it gets, the more multiple contraction it experiences. So cash to pay the bills doesn't come from debt or business operations. Not with Amazon, certainly. Amazon funds its business by printing new shares out of thin air and selling them on the open market for 0% interest and with no obligation to turn a profit or buy back the shares, ever.

The result is a freak of nature. Look for yourself, Amazon started in 1995 offering itself as a third party platform for college students to sell their used books. It went public in 1997. It didn't turn a profit for 6 years as it grew beyond used books. Do you know what the share price did in those 6 years?

It went up 5100%.

Since 2003 it's acquired a dozen or more unprofitable companies and the share price has gone up another 6000%.

If you bought one share in 1997 for $18, you would now hold 240 shares (due to stock splits) worth $44,000.

How much actual profit from business operations has Amazon generated in that time?

Around $200 billion. Which sounds like a lot, but this is a 30 year old company.

How much money has it raised by printing new shares out of thin air and selling them on the open market?

Around $419 billion.

$419b in instant cash from Wall St, versus $200b in net income from work.

Name another company that has been able to do that in the last 30 years.

Here's reason number 2-

Amazon's cloud business (Amazon Web Services) makes up 17% of its sales, but 2/3 of it's net income.

Cloud has as 36% profit margin.

This has allowed Amazon to launch all kinds of loss-leaders (more often these are M & A's). So Amazon can buy Twitch or Whole Foods, or Ring or IMDB or MGM or dump $8b to broadcast a couple dozen NFL games, and run a loss on those ventures, for years if necessary, gobbling up market share. Because it backstops those losses with profits from AWS.

Name another trucking company with a $40b / year side hustle.

There isn't one.

So yeah, I don't know if Amazon is technically a monopoly. The consumer certainly seems to have benefited. But there's a negative externality in what Amazon does to workers and the job market more generally. How are UPS drivers Post Office drivers supposed to compete against this? How are any of us?

Here's what will happen. Same thing that's going on at the USPS and UPS: we're going to get squeezed.

We're going to be timed. We're going to have quotas. We're going to get calls after we've idled for too long. We're going to have micro management on a level you can't even imagine. And it won't be because our sup's have suddenly turned into d1cks. It will be because they're given impossible mandates by THEIR bosses, because the share price is tanking as Amazon gobbles up market share- again, running a loss for years while the rest of us try to squeeze out smaller and smaller profits.

It's like this. We're middle schoolers playing pee-wee football. Some of us win, and some of us lose. But the scores are always close. Except now, the Georgia f-1ng Bulldogs have entered the chat.

 

Absolutely the best description & detailed take on Amazon I have ever heard.

I just can't explain all this in the simple, straight forward manner you have managed.

I knew from day one of Amazon first getting involved in the trucking side of things, it was going to be nothing but bad news.

Is it any wonder that news of Walmart's shift comes at same time as this?

Between the two, I see a major quake underway that is going to alter things in a ground shattering way.

And, there is nothing to stand in their way.

Maybe I'll go back to coaching Pee Wee football....... till they come for me there, too.

✌️

 

I'm wondering now when this LTL service is implemented if their going to watch the double broking going on here at Amazon in Canada? I'm seeing Amazon Loads going to bid on load boards with comments saying, 'Must be registered with Amazon' by another Freight broker.

What’s the deal with double brokering?.

 

The bulk of my residential drops are Amazon purchases. They are a royal pia, especially when i have to go back and pick it up if something is wrong with it. The customer blames me, for it being wrong, broke and then gets mad when i tell them i cant pick it up without proper paperwork.

If Amazon wants to expand their LTL in my area, go for it. Less headaches for me to deal with.

 

Well, watcha gonna do?
Ride the train, or be pissed off that it's coming through your neighborhood?
The smart people jump on the train.
The dumb people sit around saying, "why didn't I do something sooner?"
Look, it's an open market.
Either ride the train, or be pissed off.

BTW, Amazon is a very good buy right now.

 

Lmao not reading all that shxt man … say what u gotta say

 

There will come a day when some of you will say

"Why doesn't my company just hire more drivers?"

Because you've cracked a mirror or scraped a pole or made some kind of mistake. You'll have made that mistake because you were asked to do more work than ever. The work that one and a half drivers would do today. And you'll be squeezed on the other side by tighter and tighter safety micromanaging. You'll feel the squeeze because Amazon is driving your employer out of business. So don't come back here to the Rants board complaining about it. You've been warned.