Dave Clark, CEO of Amazon's (AMZN) worldwide consumer business, said in a TV interview on Monday that the company will "probably be the largest package delivery carrier in the U.S. by the time we get to the end of the year, if not in early '22." Morgan Stanley analyst Brian Nowak sees the comments from the e-commerce giant's executive implying that Amazon Logistics has shipped 90%-plus of incremental Amazon volumes since 2019. Further, he believes this could pressure UPS (UPS) ad FedEx (FDX) results.

LARGEST PARCEL CARRIER: Dave Clark, CEO of Amazon’s worldwide consumer business, said on Monday that the company is poised to become the largest U.S. package delivery service by early 2022, overtaking longstanding shipping rivals UPS and FedEx, CNBC's Annie Palmer reported. “We expect we will be one of the largest carriers in the world by the end of this year,” Clark told CNBC’s Becky Quick in an interview on “Squawk Box.” “I think we’ll probably be the largest package delivery carrier in the U.S. by the time we get to the end of the year, if not in early ’22.” Amazon has been steadily building up vast logistics and fulfillment operations since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers, the author noted.

Commenting on the news, Morgan Stanley analyst Brian Nowak noted that Amazon's comments about becoming the largest package carrier by year-end imply Amazon Logistics has shipped 90%-plus of incremental Amazon volumes since 2019. The analyst also pointed out that the comments are largely consistent with his current Amazon Logistics estimates that it will ship an estimated 6.3B packages this year versus UPS’s estimated 5.5B packages. Looking at it another way, this implies that Amazon Logistics will ship 66% of the volumes on Amazon in the U.S. as Amazon Logistics’ on-Amazon volumes grew at an estimated 74% compound annual growth rate over 2019-2021, Nowak estimated. It also implies that Amazon Logistics shipped 92% of Amazon's total incremental U.S. growth from 2019 to 2021.

However, Amazon's own volumes may just be the beginning as his current forecast implies the Amazon Logistics network may have enough capacity by 2023 to move 75% of Amazon's own U.S. volumes, as well as another 22% of non-Amazon U.S. e-commerce volumes, Nowak added. The analyst believes this could pressure UPS and FedEx results in three ways: reducing their potential leverage with customers; increasing insourcing risk; and capacity growth lining up Amazon Logistics to potentially become a third-party competitor in the U.S.

FEDEX OVER UPS: On Monday, Deutsche Bank analyst Amit Mehrotra downgraded UPS to Hold from Buy with a price target of $221, down from $253. After the 120% increase in shares since the firm's upgrade to Buy 21 months ago, the stock's risk/reward is better balanced, Mehrotra told investors in a research note. The analyst now prefers FedEx over UPS given the former's "severe" underperformance year-to-date and UPS's upcoming renegotiation with its union. The upcoming contract negotiation between UPS and the Teamsters "has potential to be the most tumultuous since the 15-day UPS work stoppage in 1997," Mehrotra argued.

PRICE ACTION: In Tuesday's midday trading, shares of Amazon have dropped about 2% to $3,496, while UPS has slid almost 3% to $198.61. Also lower amid a broader market selloff, shares of FedEx have slipped about 3% to $232.35.