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Amazon is also putting FedEx UPS up with the new service called Shipping with Amazon. The new technology giant business unit is said to ship directly to their businesses and customers.
The timeframe for rollout is soon, too: Amazon is said to be readying the service for its first launch in LA in the “coming weeks,” starting, not surprisingly, with companies that sell stuff via its website. After its initial launch in LA, Amazon will look to expand it out to other cities, possibly as soon as later this year, the WSJ says.
The company is expected to begin testing the new service in Los Angeles within the next few weeks. Initially, the service will start with third parties and their products, and then directly to businesses.
This should not be surprising to anyone following Amazon’s moves on the logistics front – the retail giant has its own fleet of cargo jets, its own warehouses, its own last-mile contract couriers and can even act as an ocean shipping agent, just like both FedEx and UPS. It’s been reported for a while now that Amazon would eventually compete directly with its longstanding delivery partners.
According to a spokesman within the company, it is confirmed that Amazon will rival directly with UPS and Fedex, at even more affordable cost than the latter two.
Of course it makes sense that Amazon would extend its service to third-party merchants working on its ecommerce platform, but the report goes further, saying Amazon would eventually like to offer shipping services to basically any other business, too – with the goal of undercutting both UPS and FedEx on rates.
While the service will be tested with third-party sellers in Los Angeles, the e-commerce giant will expand the service to other cities and will open the service to other businesses beyond third-party sellers.
UPS shares were down 5.3 percent at 8 a.m., to $103.50. FedEx shares were down 4.5 percent, to $228.50. Amazon shares were up $7.45 to $1,357.95.
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