Amazon's prepping its own delivery service, report says

These ten cities have the best chance of being the home to Amazon's new headquarters. Elizabeth Keatinge (@elizkeatinge) has more.

Amazon apparently wants to deliver even more packages.

The e-commerce and retail giant is reportedly developing a "Shipping With Amazon" delivery service that would compete against FedEx and UPS, according to a report in The Wall Street Journal.

Shares of FedEx (FDX) recovered some premarket losses and were off 0.6% in early trading. UPS (UPS) stock fell 1.5%. 

Amazon plans to soon begin offering the new delivery service in Los Angeles. Initially, deliveries will involve packages from third-party sellers of goods on Amazon's site, people familiar with the plans told the Journal.

But eventually, Amazon plans to expand its delivery service to other businesses and into other cities, some perhaps later this year, the Journal reported.

Amazon did not immediately respond to a request for comment. “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,” the company said in a statement to the Journal.

Amazon sees an opportunity to build its delivery business by pricing its services under industry leaders FedEx and UPS, the Journal says.

Those companies' shares took a hit four months ago after Bloomberg reported that Amazon this year planned to expand a new delivery service — being tested on the West Coast and already in operation in India — to handle more of its own items, bypassing FedEx and UPS.

If realized, this delivery expansion to businesses beyond Amazon's own shipments and its third-party sellers would continue the Seattle-headquartered company's disruption of traditional retail and customer relationships.

Four years ago, Amazon acquired a 4.2% stake in U.K. shipping service Yodel and a 25% stake in French delivery service Colis Prive. These came after some Christmas orders were not delivered timely. Amazon has since become the sole owner of the French company. 

In 2015, Amazon bought and deployed thousands of Amazon-branded trailers in the U.S. to ferry shipments from its fulfillment centers to local sorting hubs. There were reports that Amazon had also negotiated with Boeing that year for jets to launch its own air cargo business.

This week, Amazon introduced free, two-hour delivery from Whole Foods stores to members of its $99-a-year Amazon Prime delivery service in parts of Austin, Cincinnati, Dallas and Virginia Beach. Amazon paid $13.7 billion to acquire the grocery chain last year.

© 2018 USATODAY.COM


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