00:00

Both FedEx and U.P.S. are outperforming the broader market today after Bloomberg learned that Amazon is suspending its own competing delivery service. Now FedEx had already ended its relationship with the online giant. So our Dave Olson is taking a look at what this means for the U.S. air freight industry . David look at U.P.S. up about 5 percent and FedEx going up by about seven and a half percent today . Yeah absolutely. I mean you're talking about a real shift in the industry. Actually The Wall Street Journal had this story out initially talking about how this service called a FedEx delivery that had been operating subsidies for a couple of years is now going to be put on pause as of June. And let's be clear about this. What we're talking about is a service that or directly why old FedEx and U.P.S. that would go to a customer's business pick up packages and then deliver them. You know let's face it Amazon delivers its own packages. Amazon does fulfillment for third party sellers that offer their items on the Amazon Web site. So you know we've already seen the interruption in that third party service just three weeks ago . The company decided it was going to give priority to household items consumer staples medical supplies things people needed in light of the Corona virus. So now this is another step away from providing that kind of service to customers outside of Amazon . Dave we we have a headline here that shows Amazon is increasing your pay for hourly employees by two dollars an hour you just want to share that with everyone. But separate from that we know that unlike FedEx U.P.S. still has a relationship with Amazon. So what does the decision to pause. Amazon shipping mean for U.P.S. . Well you know presumably they will be in a position to pick up some of that business. I mean yes they they have kept up a relationship with Amazon where FedEx broke away starting last June and ending in August. And the shares you know that they've had their issues since then. So you know it really becomes a matter of how does this sort of incursion into the business of FedEx and U.P.S. that then Amazon was trying to make. You know once they sort of get past the crush of orders resulting from people staying at home and then you know needing the basic products they can order on Amazon's Web site you know once that shift how do things change. That becomes the question here .