It's long been thought that Amazon would eventually launch its own delivery service to compete with the likes of UPS and FedEx. According to a new report in the Wall Street Journal, Jeff Bezos' tech giant has moved another step closer with the impending launch of Shipping with Amazon, or SWA.
According to people familiar with the matter, SWA will see Amazon picking up packages from various businesses and delivering them to customers. Sources say the service will launch in Los Angeles over the coming weeks with third-party merchants that sell goods on Amazon's online store. It will eventually roll out to more businesses and other cities.
Amazon already delivers some of its orders in a number of US cities. SWA will see drivers picking up shipments from warehouses and businesses and delivering the packages when it is able, according to WSJ sources. The move will reduce the reliance on other delivery services.
Amazon has previously invested in several shipping companies, including ones in the UK and France. It also leases aircraft and ocean freight equipment to deliver its packages.
The company spends a huge amount on shipping costs and wants to reduce this by using its own network. It will also make extra income from SWA by offering it to other businesses in the same way it did with Amazon Web Services.
The news has seen UPS' stock decline around 6% in pre-market trading while FedEx's stock dropped by about 5%. A UPS spokesperson said it continues to support Amazon and other customers and it doesn't comment on customers' business strategies or decisions regarding using UPS services.