Broken Moats
Family-Office Long/Short Research, Variant Perception
UPS, Saia and XPO are among the most exposed to competitive and price pressure from Amazon's new Supply Chain Services, yet their shares have glossed over it, with UPS up almost daily for two weeks. LTL and parcel demand is lagging, and these carriers have relied heavily on price to offset higher costs and weaker volumes. Amazon's entry should squeeze both sides, especially for domestic players. Broader trucking has support from regulatory crackdowns and AI-related flatbed demand. x.comÂ
Amazon's new Supply Chain Services is an AWS moment that favors Amazon over UPS and FedEx. Amazon is opening the logistics network it built for itself, over 100 cargo planes, 80,000 trailers, 24,000 intermodal containers and a 30-year warehouse network with AI forecasting, to all businesses, starting with P&G, 3M and American Eagle. UPS and FedEx saw this coming for years and did almost nothing, making it a Blockbuster-versus-Netflix moment for logistics. x.com x.comÂ
Amazon's logistics network protects its investment case against AI agents that could hurt its platform: agents cannot rebuild its delivery infrastructure, which has reportedly become America's largest parcel carrier. x.comÂ
UPS's post-earnings selloff is unjustified and should reverse quickly. It beat and reaffirmed guidance; revenue fell only because it ended its Amazon contract to generate more profit, which investors already knew. The selling was likely algorithm-driven. x.comÂ
Amazon's accelerating AWS growth at high margins shows the strength of its moat, but returns on heavy capex remain unproven. AWS grew 39% to $46B, its fastest growth in nearly five years, at a 38.7% operating margin; Amazon posted record operating income. Online stores grew 2%, while ads grew 11%, down from 26% last quarter. Trailing free cash flow fell to -$42.4B as net capex reached $210.7B. Returns on about $220B of planned 2026 capex remain the open question, with free cash flow the test. … Show more
FedEx Freight has significant upside on even a partial re-rating toward Old Dominion and Saia, as onshoring construction drives LTL demand. If housing reverts, demand could really amp up. Diesel costs are a concern, though FedEx Freight can add surcharges or raise rates in near real time, unlike garbage haulers Republic Services and Waste Management, which are locked into long-term municipal contracts. Tax-loss selling is the other risk, and the near term is hard to call. x.comÂ
Old Dominion and Saia look well placed as solid-balance-sheet LTL consolidators: such periods have historically been good for them, and FOX reports trucking bankruptcies amid surging diesel costs. At current valuations, they look roughly equally attractive. x.com x.comÂ
Amazon's AWS growth remains strong despite slight earnings misses. AWS revenue rose 39% year over year in Q3. Increased 2027 capex could still weigh on the shares in the short term, even if demand continues to rise. x.com x.com x.com x.comÂ
Old Dominion Freight Line can still win plenty of market share in less-than-truckload freight because so many unionized carriers remain, and they have no chance against Old Dominion and its peers. That is the answer to a question about Amazon expanding its own LTL service. x.comÂ
UPS benefits the most from falling oil prices, which should come once Trump eventually reaches a deal with Iran and puts the conflict to bed. x.comÂ
Ouster looks well positioned across autonomous vehicles, robotics, drones, transportation and logistics, and industrials after a conversation with management. It has big things happening with Amazon; management said they work very closely with Amazon but gave no specifics, possibly spanning robotics, logistics, data centers and Zoox's autonomous vehicles. x.com x.comÂ
