Report: Amazon Poised to Bite the Hand That Ships It

New shipping service for businesses could turn UPS, FedEx into rivals
By Arden Dier,  Newser Staff
Posted Feb 9, 2018 8:41 AM CST
Amazon Needs UPS, FedEx —but Maybe Not for Long
Packages being shipped in Amazon boxes ride a conveyor belt at the UPS Worldport hub in Louisville, Ky., in 2015.   (AP Photo/Patrick Semansky)

Amazon isn't just expanding grocery deliveries: The company will soon offer a shipping service for businesses, putting it in direct competition with UPS and FedEx, whose shares saw sharp declines in pre-market trading Friday, per CNBC. "Shipping with Amazon" will see Amazon pick up packages from third-party merchants who sell on Amazon's website before shipping them to buyers at lower rates than offered by UPS and FedEx—though Amazon may have to use those companies to reach areas beyond its delivery network, sources familiar with the plan tell the Wall Street Journal. The service is expected to debut within weeks in Los Angeles, where a pilot program has been in the works for more than a year.

The service could be expanded to more cities, possibly this year. "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," a spokeswoman says, without offering specifics, though the Journal notes "Shipping with Amazon" could eventually be offered to other businesses, too. Sources say Amazon will be able to undercut UPS and FedEx because it already delivers some of its own orders in 37 cities. "Any extra space it can fill in its trucks with additional deliveries is considered added revenue," the Journal reports, noting Amazon eventually hopes to offer two-day deliveries, even on weekends. (More Amazon stories.)

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