It is becoming harder to subject corporations such as Amazon to fair and substantial rates of tax © Bloomberg

E-commerce is a brutal, grinding business with scant profits and little margin for error. So Amazon naturally wants to drill deeper into another dicier business: transport and logistics. The internet juggernaut has a pilot programme in the US called Seller Flex. Here Amazon would deliver products to customers marketed on its website by third-party sellers, as part of the two-day free shipping programme called Prime.

The latest foray into delivery should not be surprising for a company already investing in trucks, planes and drones. Shares in UPS and FedEx dipped following a Bloomberg report on Seller Flex but, for all the established companies that Amazon has hurt, the shipping companies may be the most resilient.

UPS and FedEx have a collective enterprise value of nearly $200bn, after the sector essentially consolidated into a duopoly. Complex logistics requires technical expertise and capital investment on a scale only a handful of companies can match.

The e-commerce boom has been a tailwind for the pair in recent years and its proportion of revenue is only supposed to accelerate. The problem is shipments to consumers are not as profitable as transporting to businesses. Residential customers are spread out, so resources (fuel, labour) are wasted delivering a gift to grandma.

UPS and FedEx then have ramped up capital expenditures, together expected to be $10bn this year or nearly a 10th of revenue, in order to cluster deliveries more efficiently and create “synthetic density”.

Such investments are worthwhile and compare favourably with retail. Both FedEx and UPS have operating margins greater than 10 per cent. UPS boasts a return on capital above 20 per cent.

In 2016, net shipping expense at Amazon jumped 43 per cent, year over year, to $7bn (total retail revenue was 124bn). Amazon’s promises to customers about quick turnrounds has forced it to wade into an extremely expensive business where it will not be able to cut out FedEx and UPS altogether. And the part of the delivery chain it has entered happens to be the costliest. Amazon investors should be more worried than those at the shipping companies.

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