WSJ fuels speculation over Amazon's shipping plans

Amazon To Launch Its Own Delivery Service, Report Claims

Amazon's Prime membership is expanding rapidly.

News of the test sparked investor concern that the world's largest online retailer would upend the shipping market. and United Parcel Service shares were down more than 4 percent in afternoon trading.

Previous year it announced a $1.4 billion investment at the airport that's expected to be its primary air freight hub, leasing more than 900 acres for a facility that will eventually support more than 100 Amazon Air planes and employ more than 2,700 people.

Once again Amazon is in the news about logistics and the potential for encroachment on territory owned by UPS and FedEx, both of which have Amazon as a major client, the next iteration of what began as Amazon Seller Flex last fall.

What's making the courier companies nervous is the potential for Shipping With Amazon to expand into a delivery service that replaces them in delivering packages to the customer's door.

Almost five years down the road, the prospect of head-to-head competition looms larger than ever, but it remains to be seen how much Amazon is willing to invest in building out networks to compete with FedEx, UPS and USPS. They won't have a lot of control over how their products are advertised, stocked, found, bought and shipped if sold through Amazon.

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Amazon would not comment on the reports and in a statement to USA TODAY said only that it was always innovating and experimenting on behalf of customers and the businesses that sell on Amazon to create faster, lower-cost delivery choices. And the company is betting on drone deliveries to become the next big thing.

In turn, Amazon handed out scores of gift cards and refunded shipping costs to affected customers.

On the surface, it may seem like Amazon is on a quest for retribution but at least for the time being, I think Amazon's venture into shipping is more about self-preservation. Deliveries can include fresh produce and meats along with many other items.

UPS reported 8 percent revenue growth in 2017, very strong revenue per piece, and average annual price improvement of 2.9 percent, which was at the higher end of its 2-3 percent guidance range, Zaccara pointed out.

An Amazon entry into the delivery business would "send shivers down the spines of the traditional delivery companies", said Neil Saunders, the managing director of GlobalData Retail. According to the information, this new service is named "Shipping with Amazon". However, they often fail to come close to meeting the time frames that you see with orders fulfilled through Amazon itself, she told the E-Commerce Times. Some of those shipments can take eight days versus Amazon's own two to three days, Rosenblum noted. The video revealing's Amazon launch strategy comes just one day after Amazon announced its "Shipping with Amazon" delivery service-only accessible to third-party Amazon sellers.


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