By Susie Gharib
March 22, 2017

Can Amazon take on FedEx?

Not a chance if you ask FedEx Founder and CEO Fred Smith. He has a simple explanation: “Amazon is a retailer. We’re a transportation company.”

Amazon is also a disruptor. The Seattle-based company started as an online bookseller and then expanded to selling just about everything. Along the way it disrupted many traditional retailers and has grown into the largest Internet retailer in the world. Now, Amazon is investing in trucks, planes, drones and delivery facilities and many industry experts believe the giant retailer is gearing up to be a full-scale shipping network.

Speaking with Fortune’s Susie Gharib, Smith downplays the speculation. He says FedEx, UPS and the U.S. Postal Service are the primary shippers of Amazon packages and he doesn’t see that changing. Amazon may be investing in some transportation systems, Smith says, but they are nowhere near the scale of the FedEx network with thousands of flights, trucking routes, distribution hubs, sorting facilities, and trucking routes serving 220 countries and delivering 12 million packages every day.

As Smith explains it: “The difference between what Amazon is versus what FedEx is, is the difference in naval ships between an aircraft carrier and a submarine. But because both units deliver packages, there’s a misconception on the part of the outside world.”

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