Seattle-based Amazon’s long-rumored delivery service — and feared disruptor of FedEx Corp. and the United Parcel Service (UPS) — may actually be coming soon, according to Bloomberg. Reports emerged this week that Amazon is testing the service as part of its push to expand free two-day delivery offerings and solve its warehouse overcrowding problem.
Citing two sources familiar with the plan, Bloomberg reported Thursday (Oct. 5) that the expansion of Amazon’s logistics support will push the massive online retail player into more direct competition with UPS and FedEx.
Amazon has been developing this system in India over the last two years, but its migration to the U.S has been somewhat slower than anticipated. In fact, the pilot program has remained a closely guarded secret. Reports indicated, however, that the project will be called “Seller Flex” and has been quietly online in testing in West Coast states with a broader rollout planned in 2018.
Amazon has neither confirmed nor denied reports regarding the rollout of its potential new delivery service offering, Bloomberg noted.
As part of its new delivery service, Amazon would pick up packages filled with ordered items from third-party merchants selling in its marketplace and deliver the items directly to customers’ homes. The company might still have some use for its partnerships with FedEx and UPS for delivery, but the in-house delivery program would allow Amazon to logistically control the flow of goods for its partner merchants.
And, the hypothetical news has already sent out market ripples. Following the emerging reports, FedEx saw its shares fall 2.4 percent to $216 in early trading on Thursday (Oct. 5), while UPS saw its own decline of 2.2 percent to $116.4.