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.
Amazon is weeks away from entering the shipping industry, according to a report Friday by the Wall Street Journal, which cited "people familiar with the matter".
As it turns out, Amazon is gearing up to launch a new shipping and delivery service in an attempt to better control the deliveries of products purchased on its website.
Contacted by French Press Agency (AFP), Amazon did not directly comment on the report but said, "We're always innovating and experimenting on behalf of customers and the businesses that sell and grow on Amazon to create faster lower-cost delivery choices".
Amazon may be a one stop shop for home goods, electronics, furniture, clothing and more, but in order to actually get items to your home, the e-commerce giant has to depend on delivery services like FedEx and UPS. Others have concurred: "We believe it is likely Amazon will make a concerted effort to take over ever larger portions of its supply chain", RBC Capital Markets analyst Mark Mahoney said past year. Wellington Mgmt Grp Ltd Liability Partnership holds 0.2% of its portfolio in FedEx Corporation (NYSE:FDX) for 3.84M shares. Amazon has been pushing more aggressively into delivery for a while.
Walmart announced in November 2017 that it acquired Parcel, a same-day delivery startup, in an apparent attempt to keep pace with Amazon's growing infrastructural power while vamping up its own services. Entities from Netflix and the U.S. Central Intelligence Service now employ those services.
"The danger for the traditional delivery firms is twofold". For many years, the company has been building out its delivery infrastructure, expanding into ocean freight, leasing its own cargo planes, working on ways to deliver packages directly inside your house with Amazon Key, and even bringing drone delivery initiative to the table.
The service would initially be developed in Los Angeles (United States), although it is expected to "expand gradually to or cities" this same year, as reported by WSJ.
An earlier report on Amazon's plan "demonstrates a lack of basic understanding of the full scale of the global transportation industry", FedEx spokesman Patrick Fitzgerald said. First, they are likely to lose business from Amazon itself. The company swallowed up Whole Foods recently and have begun offering food delivery in select locations.