Amazon takes aim at the supply chain
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Amazon is offering its distribution, parcel shipping and fulfillment services to outside businesses, not just to those on its marketplace.
Why it matters: The $2.9 trillion company is now aiming to be a dominant force in the global supply chain, going head-to-head against delivery companies like FedEx and UPS, as well as air freight and logistics firms.
By the numbers: Shares of those companies tumbled after Amazon's announcement Monday.
- Amazon shares rose 1.4%.
Zoom out: Amazon has already built out a distribution network, with its own logistics technology.
- It was just behind USPS in the number of parcels handled in the U.S. in 2024, per Pitney Bowes, and it's projected to be No. 1 by 2028.
- Creating Amazon Supply Chain Services as a service for other businesses is somewhat like how it started Amazon Web Services, now the cloud provider for countless businesses, a point the company made in its announcement.
What they're saying: "For UPS and FedEx, this is not immediate disruption, but it is a structural warning shot, especially in e-commerce-heavy lanes where Amazon already has density, data and delivery-speed advantages," Parth Talsania, CEO of Equisights Research, told Reuters.
- The news is "a shot across the bow to the entire transport market," said Joe Gilbert, portfolio manager at Integrity Asset Management, per Bloomberg.
Editor's note: This story has been corrected to reflect that USPS (not UPS) handled the most parcels in 2024.
