Good day,
Amazon.com, Inc.(NASDAQ:AMZN) has launched a program to offer free one-day delivery to users of its popular “Prime” service, cutting its current delivery window in half and throwing down another gauntlet to retailers and logisticians across the country.
During a conference call on April 25 to discuss first quarter results, Amazon CFO Brian Olsavsky said that the company has begun ramping up the initiative, and that a clearer picture will emerge as the second quarter progresses. Amazon will spend about $800 million in the second quarter to support the program, Olsavsky said. He emphasized that Amazon will rely heavily on its shipping partners for the execution. Outside providers such as the U.S. Postal Service, UPS Inc. and FedEx Corp. move an estimated 88 percent of Amazon’s shipments.
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Did you know?
The Bureau of Economic Analysis (BEA) released results for first quarter gross domestic product (GDP), showing that overall growth in the economy improved to a 3.2 percent annualized pace. This is up from the 2.2 percent pace of growth in the fourth quarter of 2018 and far exceeded consensus estimates of 2.1 percent growth. Year-over-year growth for the first quarter climbed further to 3.2 percent, marking the fastest pace of yearly growth in the economy since the middle of 2015.
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Quotable:
“We have seen a decrease in volume because much of the grain coming from the United States is going on routes other than the Panama Canal”
— Argelis Moreno de Ducreux, ACP
In other news:
The Rust Belt stabilizes as the Sun Belt tops out
Some predictable patterns of U.S. migration are getting a little less predictable (Bloomberg)
Ford discloses Justice Department probe into vehicle emission certifications
Investigation adds to list of challenges facing Chief Executive Jim Hackett as he engineers a turnaround plan. (WSJ)
U.S. economy grew at 3.2% rate in first quarter
The report indicates that the 10-year recovery retains momentum, despite recent fears that the year was off to a slow start. (NYT)
Which economy? Three heartbeats to monitor
Donald Broughton, FreightWaves’ chief market strategist, helps explain the U.S. economy in a multi-part series. This article focuses on the industrial economy of the U.S., which is critical to the overall health of the nation. (FW)
Final thoughts:
U.S. rail traffic dipped again for the week ending April 20, according to data from the Association of American Railroads.
Year-to-date U.S. rail traffic totaled 8.24 million carloads and intermodal units, a 1.8 percent decline from the same period in 2018. Of that total, U.S. carloads, which represented 48 percent of traffic, were down 2.7 percent to 3.97 million carloads, while intermodal units fell 1 percent to 4.27 million units.
Read the full article on FreightWaves.
