Amazon is ready to launch its own delivery service to businesses that will compete directly with UPS and FedEx. The new service will be called Shipping with Amazon, and will retrieve packages from businesses and ship them directly to consumers. The service will begin operations in Los Angeles and grow from there. Laura Stevens reports for The Wall Street Journal:
While the program is being piloted with the company’s third-party sellers, it is envisioned to eventually be opened to other businesses too, according to some of the people. Amazon is planning to undercut UPS and FedEx on pricing, although the exact rate structure is still unclear, these people said.
The new service, which stems from a Los Angeles pilot project first reported by The Wall Street Journal more than a year ago, moves Amazon into direct competition for parcel business currently handled by delivery partners UPS and FedEx. “Shipping With Amazon” was previously tested and rolled out in London.
It is the latest move by Amazon to create its own freight and parcel delivery network. In the last couple of years, Amazon has expanded into ocean freight, built a network of its own drivers who can now deliver inside homes and leased up to 40 aircraft while establishing an air cargo hub.
Amazon already delivers some of its own orders in at least 37 U.S. cities. With the new “Shipping with Amazon” option, Amazon plans to send drivers to pick up shipments from warehouses and businesses itself and deliver the packages when it is able, the people said. For shipments outside Amazon’s delivery reach, the U.S. Postal Service and other carriers will take care of the so-called last mile to customers’ doorsteps.
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