Episode summary
Amazon Repackaging of Shipping Services Fuels UPS, FedEx Selloff | Bloomberg Intelligence
Bloomberg Intelligence
· · 21 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Lee Klaskow, Jennifer Bartashus, Brian Egger, Spencer Soper
Summary
Amazon’s expanded logistics push sparked a sharp selloff in US transportation stocks, but the guest argued the reaction was overdone. He said Amazon has been building these capabilities quietly for years, and that the real impact is more likely to hit freight forwarders, warehousing and distribution providers, and some brokerage businesses than the high-margin core businesses of FedEx and UPS. He also said relationships, consistency, and service quality still matter, so Amazon will have to earn business before it becomes a broad threat.
Tyson Foods’ results were framed around strong protein demand, with chicken and pork performing better than beef. The guest said beef remains pressured by record-low US cattle supplies, which keeps input costs high and drives operating losses. He added that the supply-demand imbalance could last two to three years because ranchers are not rebuilding herds quickly, in part because of higher rates and weather risk. Tyson’s plant closures and shift cuts were presented as prudent attempts to manage what it can control.
Norwegian Cruise Line’s weaker guidance was described as a mix of company-specific execution issues and external pressure from the Middle East conflict, which has lifted fuel costs and weighed on Europe demand. The guest said new management is still realigning the business and cutting costs. The final segment on GameStop’s bid for eBay centered on skepticism: the guest questioned funding, strategic logic, and whether the deal is realistic given the financing gap and the market’s doubts.
Key takeaways
- The guest said Amazon’s logistics expansion is more likely to pressure freight forwarders and warehouse operators than FedEx or UPS.
- The guest called the selloff in FedEx and UPS an overreaction and said the businesses are fundamentally no different than they were yesterday.
- Tyson’s chicken and pork businesses are benefiting from strong protein demand, while beef remains hurt by record-low cattle supply.
- The guest expects beef supply constraints to persist for two to three years because herd rebuilding is slow and expensive.
- Norwegian Cruise Line’s weaker outlook reflects both Middle East disruption and company-specific execution problems under a new CEO.
- The guest questioned whether GameStop can finance its $56 billion bid for eBay and said the market is skeptical of the deal.
Notable quotes
“we expect that the things that they're going to go after might not be the high margin businesses”
“fundamentally FedEx and UPS are no different than they were yesterday”
“protein demand is through the roof”
“we just don't have enough cattle uh, being raised um, to be processed”
“This is NCH. That's the ticker we are dealing with here. And by now you should have learned to always expect the unexpected”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, one of the most read stories uh on the Bloomer terminal today in uh impacts some of these uh FedEx, UPS, and some of these shipping companies.
US transportation stocks plunged Monday after Amazon.com announced expanded logistics offering. Amazon will offer freight distribution and fulfillment and parcel shipping to businesses beyond Amazon sellers, including companies such as 3M and Lanzen. Wow, that's a change.
Lee Klascow. He covers all the logistics companies here, including the the FedExes and the UPS's of the world. This seems like a big announcement.
Lee, put it into context for us. Yeah, actually um you know, it's pretty interesting the market reaction. Uh Amazon has been kind of doing this quietly.
Uh a lot of the services that they announced that they're going to be offering uh for quite some time, for two or three years now. Uh I guess they're you know making an official push that they're trying to get uh broader or cast a wider net in terms of the customers that they can reach. You know we we would say for the freight transportation world the sky really isn't falling.
Uh yes Amazon will be a competitor but we expect that the things that they're going to go after might not be the high margin businesses that the FedEx's and the UPS's of the world we're going after. uh and it's going to be felt by you know freight forwarders such as like uh companies like expediters or DSV and also uh also folks in in the warehousing and distribution uh uh business like a GXO.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon logistics competition
- ups fedex selloff
- tyson foods earnings outlook
- norwegian cruise disruptions
- gme bid for ebay debt financing
Companies and tickers mentioned
- AMZN
- UPS
- FDX
- TSN
- NCLH
- GME
- EBAY
- TD
- Amazon.com
- UPS
- FedEx
- Tyson Foods
- Norwegian Cruise Line
- GameStop
- eBay
- TD Bank
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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