FedEx, UPS jockey with Amazon as tech giant expands into shipping - CNBC

A worker pushes Amazon.com Inc. packages in front of a FedEx Corp. delivery truck in New York.

Christopher Lee | Bloomberg | Getty Images

The years-long battle between Amazon and retail companies has spilled over into the shipping industry, with FedEx and UPS adjusting their strategies as the tech giant, once simply a customer, is now a major competitor.

FedEx has announced two changes to its relationship to Amazon in recent months, including ending the ground delivery contract with the e-commerce pioneer. Meanwhile, UPS is exploring new technologies, such as drones and self-driving trucks, to modernize its delivery services.

The moves come as Amazon is building up its delivery fleet, renting planes and offering $10,000 to its employees to leave the company and start their own local delivery business.

"I think they have stated that they are now a competitor to the transport industry," said Ken Hoexter, a research analyst at Bank of America Merrill Lynch. "And FedEx has clearly viewed them now in their recent moves as an increasing competitor."

Just as some retail companies are uneasy about working with Amazon, which can be both a partner and a competitor, transportation companies are facing a similar dilemma. And with their customers facing off against Amazon in other industries, shipping companies may need to take sides.

Dan Neiweem, co-founder and principal of digital services and solutions provider Avionos, said that by ditching Amazon, FedEx may make itself more attractive to Amazon's competitors in the retail space.

He compared it to reports that WalMart is pressuring some of its partners to use Microsoft's Azure for cloud computing instead of Amazon Web Services. WalMart said "there are a small number of cases involving our most sensitive sales data that we'd prefer not sit on a competitor's platform" but its vendors can choose the cloud service they prefer.

"I think that what you'll see is that a lot of the shipments that Amazon was going into the USPS and FedEx with are now going to be transitioned from other retailers who are saying 'hey I don't anybody in my space who works with Amazon,'" Neiweem said. "And you see that parallel very, very tightly with AWS and Azure."

FedEx never relied on Amazon for a huge portion of its business. In a June statement announcing that Amazon would no longer be served by FedEx Express, the shipping company said Amazon accounted for 1.3% of its total revenues in 2018, or roughly $900 million.

From that perspective, FedEx's decision to cut ties with Amazon makes sense, Hoexter said.

"When you go to their sort centers, you can see that Walmart and Jet are a major customer of FedEx's, so certainly that relationship is as important if not more important than Amazon," Hoexter said.

"So if you have to choose one, if UPS is larger with Amazon and you're larger with Walmart, you're going to kind of work closer with that candidate."

Growing demand

Throughout its rise, Amazon has relied on UPS for a large portion of its shipping needs. UPS is still more exposed to Amazon than FedEx was. David Ross, transportation research analyst at Stifel, said he estimates that UPS gets between 7% and 9% of its total revenue from Amazon.

"If you go back 10, 15 years UPS was the chosen parcel carrier by Amazon, and when they started their prime two-day offering it was a lot of UPS," Ross said.

Amazon started using the U.S. Postal Service more after the delivery companies struggled to deliver packages on time during the 2013 holiday season, Ross said.

Online shopping has continued to grow since then. According to the U.S. Census Bureau, e-commerce has grown from roughly 4% of total retails sales in 2010 to more than 10% earlier this year. FedEx said it expects e-commerce to grow to 100 million packages per day in the U.S. by 2026.

As e-commerce has boomed, Amazon has struck out more on its own and built a sizable delivery network. The tech giant may not be delivering many third-party packages right now, but Neiweem said that's "sort of the last stand or threshold that they haven't crossed yet."

UPS and FedEx are also investing in their businesses, with both companies expanding delivery to 7 days per week.

FedEx, which said it has "a strong relationship with retailers of all sizes," has started offering retailers extended hours for package pickup, partners with stores such as Dollar General to create customer pick up areas and is experimenting with a delivery robot.

UPS, which saw demand for next day air shipping increase 30% in the second quarter, has invested in TuSimple, an autonomous shipping business, and is forming a drone subsidiary called UPS Flight Forward. The company is also expanding its air fleet and is scheduled to add 11 cargo planes this year.

Next steps

The growing demand for fast shipping has weighed on the financial results for large shipping companies. More home deliveries means shipping companies make less per stop than if they delivered a lot of packages to one spot, like a convenience store.

Hoexter said that domestic margins at UPS have been under pressure for the past several years, and that is where analysts will look to see if its new investments and increased leverage with Amazon are working.

"As we get into peak season, have they found a way to stabilize those margins despite the growth of e-commerce? That's going to be the key for the stock. When you ask what do we look for its the margin side and pricing if we start to see that improving or stabilizing. That's the first step," Hoexter said.

With FedEx now out of the picture, UPS may also be able to gain some short-term leverage on pricing, Hoexter said. That opportunity may not last for long, as Amazon continues to expand its own delivery network and expects to have 70 planes in its fleet by 2021.

For FedEx, the separation means the company can show that its e-commerce success is not tied to Amazon.

"FedEx is just showing people that they don't need Amazon to be a good business, and they feel that they can continue to grow without Amazon. I think they wanted to just distance themselves from Amazon in a way that made their own growth story a little more clear to people," Ross said.

Let's block ads! (Why?)

https://www.cnbc.com/2019/09/01/fedex-ups-jockey-with-amazon-as-tech-giant-expands-into-shipping.html

2019-09-01 13:01:14Z
CAIiEHuSFEhTyvNcbHJGLDsx24YqGQgEKhAIACoHCAow2Nb3CjDivdcCMO7tngY

4 Reasons to Relocate in Retirement - Motley Fool

Many seniors wind up retiring in the same place they lived during their working years. And if the city or town you lived in throughout your career is filled with amenities, family members, and friends, then you may want to stay put during your golden years. At the same time, relocating in retirement could make for a more relaxed, stress-free lifestyle. Here are a few reasons to consider making a move.

1. You live somewhere with a high cost of living

Some cities are more expensive than others across the board. Often, living in a pricey city gives you access to better jobs and a higher paycheck, but once you stop working, that's no longer a motivating factor to stay. Therefore, if you live someplace where the overall cost of living is high, moving could allow you to better stretch your limited income.

IMAGE SOURCE: GETTY IMAGES.

2. You live in an area with high income or property taxes

High taxes can be a source of financial stress in retirement, even if you live someplace that isn't all that expensive. Though you won't be collecting a paycheck from a full-time job, you'll still have income from Social Security, retirement savings (hopefully), or maybe a part-time job or business. The less tax you pay on that income, the more money you'll have left over to spend.

The same holds true for property taxes. Many seniors enter retirement with their mortgages already paid off, but even if you own your home outright, high property taxes can be brutal when you're on a fixed income. Moving someplace where it's cheaper to own a home could therefore help you better manage your limited income.

3. You live in a state that taxes Social Security

Most states do not impose a tax on Social Security benefits, but there are 13 that do:

1. Colorado
2. Connecticut
3. Kansas
4. Minnesota
5. Missouri
6. Montana
7. Nebraska
8. New Mexico
9. North Dakota
10. Rhode Island
11. Utah
12. Vermont
13. West Virginia

The good news is that most of these states also offer exemptions for low-income to middle-income households, so if your retirement income isn't particularly high, you may avoid taxes on your Social Security benefits. The only states that don't offer an exemption at all are Minnesota, North Dakota, Vermont, and West Virginia. Still, it pays to consider moving someplace where you won't have to worry about state taxes on your benefits.

That said, some of the above states may offer a lower cost of living on a whole, so don't let taxes on Social Security benefits be the sole factor that informs your decision. Also, keep in mind that even if you manage to avoid Social Security taxes at the state level, you may be taxed on those benefits at the federal level, especially if they're not your only source of retirement income.

4. You live someplace where you absolutely need a car

Living in a walkable city, or one with public transportation, could save you a significant amount of money during retirement by allowing you to get by without a car. It costs $8,849 a year, on average, to own a vehicle, according to AAA.

Meanwhile, walking is free, and public transportation can be relatively cheap compared to automobile ownership, especially since many cities offer discounts to seniors. Living someplace walkable can also help keep you in shape, thereby saving you some money on healthcare.

Relocating in retirement isn't an easy thing to do. It costs money to pack up your life and move, but if you make that investment, it could make your golden years easier from a financial perspective. And who knows? You may find that your new city offers more activities and social opportunities than you had access to previously.

Let's block ads! (Why?)

https://www.fool.com/retirement/2019/09/01/4-reasons-to-relocate-in-retirement.aspx

2019-09-01 10:18:00Z
52780368215006

The 3 Best Ages to Claim Social Security Benefits - Motley Fool

Whether you're already retired or plan to retire at some point in the future, the data doesn't lie: Social Security has a good chance of helping you to make ends meet.

According to data from the Social Security Administration, more than 3 out of 5 retirees lean on the program to account for at least half of their monthly income. Meanwhile, two separate polls from Gallup found that 90% of current retirees, and 83% of future retirees, will rely on Social Security as either a "major" or "minor" source of income. This means that deciding when to take Social Security just might be the most important decision seniors make.

Image source: Getty Images.

Your claiming age has a big impact on how much you'll receive from Social Security

Although there are a number of factors that can affect how much seniors are paid by Social Security, including your work history, earnings history, and birth year, it's your claiming age that can have the biggest impact on your monthly and lifetime payout.

As you may already be aware, Social Security allows eligible retirees to begin taking their benefit at age 62, or any point thereafter. The catch is that the program incents patience. For each year an individual holds off on taking their payout, it'll grow by approximately 8%, up until age 70.

All things being equal -- work history, earnings history, and birth year (which determines your full retirement age) -- a person claiming at age 70 could receive a monthly payout that's up to 76% higher than someone claiming as early as possible at age 62. The trade-off being that the person claiming at 62 could receive a (reduced) payout for up to eight years before the individual at age 70 receives their first payout.

Trying to figure out which claiming strategy works best for your situation isn't easy, especially given that we don't know our expiration date, and there's no concrete guide that works for everyone.

Image source: Getty Images.

The three best ages to take your Social Security benefit

However, there is a new study from United Income that took a hard look at Social Security claiming data from the University of Michigan's Health and Retirement Study (HRS) to determine the ages where taking Social Security benefits was optimal. The results showed an almost perfect inversion of when people are taking benefits versus when they should be taking them.

According to the analysis from United Income, just 6.5% of the senior households that were included via the HRS would have made an optimal claiming choice by taking their payout at ages 62, 63, or 64. Yet, close to 4 out of 5 senior households that were analyzed had taken their payouts prior to reaching age 65. In layman's terms, these early claimants wound up leaving a lot of money on the table, at least in hindsight.

On the other end of spectrum, United Income was able to identify a handful of ages that maximized what claimants received over their lifetime. The data showed that 57% of seniors would have been better off waiting until age 70 to take their payout, with around 10% benefiting from an age 67 claim, and just shy of 10% from an age 69 claim. And yes, if you're curious, age 68 was the fourth-most optimal claiming age. In effect, more than 4 out of 5 seniors would be best off waiting until age 67 or later to begin taking their benefit. And, as a reminder, age 67 is the full retirement age for anyone born in 1960 or later.

Image source: Getty Images.

Your claiming strategy is a bit of science and luck

While the data is pretty clear that seniors would overwhelmingly be better off waiting to take their Social Security benefit, the fact remains that this suggestion won't work for everyone. That's because none of us knows (thankfully) our expiration date in advance, which is an important piece of information if we're going to maximize our lifetime payout from the program.

In order for seniors to have the best chance at maximizing their lifetime benefit, they'll need to really think about the variables that matter most to them. This involves taking into consideration your health history, financial situation (i.e., need for immediate income), and marital status, to name a few factors.

For example, if you're in excellent health; have no chronic health conditions; and have immediate family members, such as parents, who have lived well into their 80s, if not longer, science would suggest that you have longevity on your side. That would mean a later Social Security claim should give you the best chance to maximize your monthly and long-term payout.

However, some luck is involved, too. Without knowing our expiration date, we simply won't know if we made an optimal claiming decision until well after the fact. All we can say with certainty, at least from United Income's analysis via the HRS, is that far too many seniors claim Social Security benefits early, and it's resulted in a lot of money being left on the table.

Let's block ads! (Why?)

https://www.fool.com/retirement/2019/09/01/the-3-best-ages-to-claim-social-security-benefits.aspx

2019-09-01 10:06:00Z
52780368215006

Gut Check Time for Treasuries After Biggest Rally Since 2008 - Bloomberg

[unable to retrieve full-text content]

Gut Check Time for Treasuries After Biggest Rally Since 2008  Bloomberg

The rally that swept through the Treasury market in August is the strongest since the depths of the 2008 crisis. This insatiable demand for the safety of bonds ...

View full coverage on Google News
https://www.bloomberg.com/news/articles/2019-09-01/gut-check-time-for-treasuries-after-biggest-rally-since-2008

2019-09-01 04:46:00Z
CAIiEDzi-QXd-iLpKtvVsyDaCOgqGQgEKhAIACoHCAow4uzwCjCF3bsCMIrOrwM

China's factory activity shrinks for 4th month as trade woes deepen - CNBC

Workers assemble televisions on the production line of Tianle Group Co., Ltd on July 3, 2012 in Shengzhou of Zhejiang Province, China.

Feng Li | Getty Images

Factory activity in China shrank in August for the fourth month in a row as the United States ramped up trade pressure and domestic demand remained sluggish, pointing to a further slowdown in the world's second-largest economy.

Persistent weakness in China's vast manufacturing sector could fuel expectations that Beijing needs to roll out stimulus more quickly, and more aggressively, to weather the biggest downturn in decades.

The Purchasing Managers' Index (PMI) fell to 49.5 in August, China's National Bureau of Statistics said on Saturday, versus 49.7 in July, below the 50-point mark that separates growth from contraction on a monthly basis.

A Reuters poll showed analysts expected the August PMI to stay unchanged from the previous month.

The official factory gauge showed growing trade frictions with the United States and cooling global demand continued to wreak havoc on China's exporters.

Export orders fell for the 15th straight month in August, although at a slower pace, with the sub-index picking up to 47.2 from July's 46.9.

Total new orders - from home and abroad - also continued to fall, indicating domestic demand remains soft, despite a flurry of growth-boosting measures over the past year.

"Frontloading of exports to the U.S. ahead of higher tariffs supported trade and overall activity growth, but this effect will likely fade in the next few months," said analysts at Goldman Sachs in a note.

Manufacturers in consumption-oriented industries such as the auto sector have been especially vulnerable. Carmakers such as Geely and Great Wall have slashed expectations for sales and profits.

The data showed activity at medium- and small-sized firms contracted, even as large manufacturers, many backed by the government, managed to expand in August.

Factories continued to shed jobs in August amid the uncertain business outlook. The employment sub-index dropped to 46.9, compared with 47.1 in July.

Escalations

August saw dramatic escalations in the bitter year-long Sino-U.S. trade row, with President Donald Trump announcing early in the month that he would impose new tariffs on Chinese goods from Sept. 1, and China letting its yuan currency sharply weaken days later.

After Beijing hit back with retaliatory tariffs, Trump said existing levies would also be raised in coming months. The combined moves now effectively cover all of China's exports to the United States.

Trump said late on Friday that trade teams from both sides continue to talk and will meet in September, but tariff increases on Chinese goods set to go into effect on Sunday will not be delayed.

The U.S. president had said earlier in the week that China wants to reach a deal "very badly", citing what he described as increasing economic pressure on Beijing and job losses.

But most analysts are highly doubtful of an end to the dispute any time soon, and some have recently cut growth forecasts for China in coming quarters.

The sudden deterioration in trade ties has prompted speculation over whether China needs to roll out more forceful measures to keep growth from sliding below 6% this year, the bottom end of its target range of around 6.0-6.5%.

Analysts widely expect Beijing will cut some of its major lending rates in September for the first time in four years to help stabilize growth.

But sources had told Reuters before the latest trade escalations that big benchmark rate cuts were considered a last resort, as policymakers worry that could fuel a further build-up in debt and squeeze bank's profit margins, heightening financial sector risks.

So far, Beijing has relied on a combination of fiscal stimulus and monetary easing to deal with the economic slowdown, including hundreds of billions of dollars in infrastructure spending and tax cuts for companies.

But analysts note infrastructure investment growth has remained subdued despite the earlier pump-priming measures, underlining the need for additional support.

Services growth

Growth in China's services sector activity picked up for the first time in five months in August, with the official numbers from a separate business survey rising to 53.8 from 53.7 in August.

Beijing has been relying on a strong services sector to cushion some of the economic impact from trade uncertainties and sluggish manufacturing activities.

However, despite the higher overall figure, activity in the property industry contracted, the statistics bureau said in a statement.

The services sector has been propped up by Chinese consumers' rising wages and robust spending power in recent years. However, the sector softened late last year amid a broader slowdown.

Let's block ads! (Why?)

https://www.cnbc.com/2019/08/31/chinas-factory-activity-shrinks-for-4th-month-as-trade-woes-deepen.html

2019-08-31 10:00:29Z
52780369076438

China's factory activity shrinks for 4th month as trade woes deepen - CNBC

Workers assemble televisions on the production line of Tianle Group Co., Ltd on July 3, 2012 in Shengzhou of Zhejiang Province, China.

Feng Li | Getty Images

Factory activity in China shrank in August for the fourth month in a row as the United States ramped up trade pressure and domestic demand remained sluggish, pointing to a further slowdown in the world's second-largest economy.

Persistent weakness in China's vast manufacturing sector could fuel expectations that Beijing needs to roll out stimulus more quickly, and more aggressively, to weather the biggest downturn in decades.

The Purchasing Managers' Index (PMI) fell to 49.5 in August, China's National Bureau of Statistics said on Saturday, versus 49.7 in July, below the 50-point mark that separates growth from contraction on a monthly basis.

A Reuters poll showed analysts expected the August PMI to stay unchanged from the previous month.

The official factory gauge showed growing trade frictions with the United States and cooling global demand continued to wreak havoc on China's exporters.

Export orders fell for the 15th straight month in August, although at a slower pace, with the sub-index picking up to 47.2 from July's 46.9.

Total new orders - from home and abroad - also continued to fall, indicating domestic demand remains soft, despite a flurry of growth-boosting measures over the past year.

"Frontloading of exports to the U.S. ahead of higher tariffs supported trade and overall activity growth, but this effect will likely fade in the next few months," said analysts at Goldman Sachs in a note.

Manufacturers in consumption-oriented industries such as the auto sector have been especially vulnerable. Carmakers such as Geely and Great Wall have slashed expectations for sales and profits.

The data showed activity at medium- and small-sized firms contracted, even as large manufacturers, many backed by the government, managed to expand in August.

Factories continued to shed jobs in August amid the uncertain business outlook. The employment sub-index dropped to 46.9, compared with 47.1 in July.

Escalations

August saw dramatic escalations in the bitter year-long Sino-U.S. trade row, with President Donald Trump announcing early in the month that he would impose new tariffs on Chinese goods from Sept. 1, and China letting its yuan currency sharply weaken days later.

After Beijing hit back with retaliatory tariffs, Trump said existing levies would also be raised in coming months. The combined moves now effectively cover all of China's exports to the United States.

Trump said late on Friday that trade teams from both sides continue to talk and will meet in September, but tariff increases on Chinese goods set to go into effect on Sunday will not be delayed.

The U.S. president had said earlier in the week that China wants to reach a deal "very badly", citing what he described as increasing economic pressure on Beijing and job losses.

But most analysts are highly doubtful of an end to the dispute any time soon, and some have recently cut growth forecasts for China in coming quarters.

The sudden deterioration in trade ties has prompted speculation over whether China needs to roll out more forceful measures to keep growth from sliding below 6% this year, the bottom end of its target range of around 6.0-6.5%.

Analysts widely expect Beijing will cut some of its major lending rates in September for the first time in four years to help stabilize growth.

But sources had told Reuters before the latest trade escalations that big benchmark rate cuts were considered a last resort, as policymakers worry that could fuel a further build-up in debt and squeeze bank's profit margins, heightening financial sector risks.

So far, Beijing has relied on a combination of fiscal stimulus and monetary easing to deal with the economic slowdown, including hundreds of billions of dollars in infrastructure spending and tax cuts for companies.

But analysts note infrastructure investment growth has remained subdued despite the earlier pump-priming measures, underlining the need for additional support.

Services growth

Growth in China's services sector activity picked up for the first time in five months in August, with the official numbers from a separate business survey rising to 53.8 from 53.7 in August.

Beijing has been relying on a strong services sector to cushion some of the economic impact from trade uncertainties and sluggish manufacturing activities.

However, despite the higher overall figure, activity in the property industry contracted, the statistics bureau said in a statement.

The services sector has been propped up by Chinese consumers' rising wages and robust spending power in recent years. However, the sector softened late last year amid a broader slowdown.

Let's block ads! (Why?)

https://www.cnbc.com/2019/08/31/chinas-factory-activity-shrinks-for-4th-month-as-trade-woes-deepen.html

2019-08-31 09:55:02Z
52780369419279

Tweeters Make Same Chilling Point About Jack Dorsey's Account Being Compromised - HuffPost

HuffPost is now part of the Oath family. We (Oath) and our partners need your consent to access your device, set cookies, and use your data, including your location, to understand your interests, provide relevant ads and measure their effectiveness. Oath will also provide relevant ads to you on our partners' products. Learn More

How Oath and our partners bring you better ad experiences

To give you a better overall experience, we want to provide relevant ads that are more useful to you. For example, when you search for a film, we use your search information and location to show the most relevant cinemas near you. We also use this information to show you ads for similar films you may like in the future. Like Oath, our partners may also show you ads that they think match your interests.

Learn more about how Oath collects and uses data and how our partners collect and use data.

Select 'OK' to allow Oath and our partners to use your data, or 'Manage options' to review our partners and your choices. Tip: Sign In to save these choices and avoid repeating this across devices. You can always update your preferences in the Privacy Centre.

Let's block ads! (Why?)

https://www.huffpost.com/entry/jack-dorsey-twitter-account-fears-trump_n_5d6a1e6fe4b01108044f6f7a

2019-08-31 07:46:00Z
52780368879424