Consumers can breathe a sigh of relief about the higher fuel costs, at least for now.
“There would be an impact to Amazon’s costs but you wouldn’t see it in the short term because you are a Prime customer and don’t pay shipping,” said Peter Guarraia, who heads Bain & Co.’s supply chain consulting team.
The United States Postal Service has the capacity to handle “projected surges in volume” but declined to comment on the impact of fuel prices.
Companies like FedEx and UPS that ship and deliver packages for Amazon can somewhat offset the cost of pricier fuel with surcharges.
“Packages shipped as part of a special promotion carry the same surcharge as any other shipment,” said UPS spokesman Jim Mayer.
These companies are now competing more with Amazon itself, which is building out its own logistics network, with fleets of trucks, vans and planes. Amazon declined to comment.
Amazon in 2016 said it was starting its own air cargo network, under agreements with Atlas Air Worldwide Holdings and Air Transport Services Group. Atlas Air does not hedge fuel and under wet leasing agreements, in which a crew, maintenance and other services are provided, and dry leasing agreements has “no direct fuel price exposure because our customers are required to pay for aircraft fuel,” said spokeswoman Beth Roach.
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