Amazon has moved to turn its vast logistics machine into a standalone business, a step that sent shares in FedEx, UPS and several other transport groups lower as investors weighed the prospect of a new, well-funded rival in freight and delivery.
According to Amazon, the company has launched Amazon Supply Chain Services, a platform that opens its freight, fulfilment, distribution and parcel-shipping network to outside businesses. The service is aimed at companies across retail, ...
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manufacturing, healthcare, automotive and other sectors, and can be managed through a single online console.
The offering bundles ocean, air, ground and rail freight with inventory management and demand-forecasting tools powered by artificial intelligence. Amazon says that should help customers place stock closer to demand and speed up deliveries, while giving them access to its distribution centres and shipping network without having to build the infrastructure themselves.
The move immediately rattled the market. FedEx fell sharply in early trading, while UPS also dropped, with other logistics names including GXO Logistics, XPO and Hub Group moving lower as well. Amazon shares rose on the news.
The company said early users include Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters. In one example, Amazon said P&G is using the network to move raw materials and finished goods, while 3M is relying on it to transfer products from factories to distribution centres.
Amazon’s logistics scale has become a key part of its competitive edge. The company has spent years building out its own delivery system, including a large fleet of trailers, intermodal containers and aircraft, originally designed to support its retail and marketplace operations. By offering that network to third parties, Amazon is effectively taking a capability that once supported only its own business and turning it into a new revenue stream.
For established carriers, that raises a more serious challenge than a single product launch. Amazon is no longer just a major shipper that depends on outside providers; it is now positioning itself as an alternative to them. That could intensify pressure in a sector already defined by thin margins, intense competition and a growing need for faster, more flexible delivery.
Source: Noah Wire Services
