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Expand chart
Data: Rakuten Intelligence; Chart: Axios Visuals

Less than a decade after Amazon broke into the logistics industry, it has become its own biggest shipper.

Why it matters: While the world has fixated on Amazon's moves into books, groceries and cloud computing, perhaps most formidable of all has been its swift break into a different business — package delivery.

In a relatively short time, Amazon has built up a logistics arm that is already turning this industry worth many billions on its head.

  • "Amazon is about 40% of all e-commerce. If they're handling half of their own shipments, that's 20% of the whole market," Alex Pellas, a logistics expert at market research firm Rakuten Intelligence, says. "That's huge."

In a dataset provided first to Axios, Rakuten Intelligence followed tracking numbers for millions of Amazon packages per month.

  • Researchers found that nearly half (48%) of Amazon packages are delivered by the company itself.
  • That's a dramatic shift from two years ago, when the Postal Service delivered more than 60% of Amazon parcels, and Amazon just around 15%.

The total U.S. domestic package market in 2018 was about $106 billion. Of that, $35–$40 billion, or about a third, was e-commerce, according to David Vernon, an analyst at Bernstein.

In a statement to Axios, Amazon said, “The numbers are not an accurate representation of how Amazon shipments are shared between Amazon and our carrier partners.”

What's happening: As Amazon becomes a shipping juggernaut in its own right, experts say it will attack two different sets of rivals — retailers and shippers.

  • The e-commerce behemoth is already faster than competitors — and it has ambitions of getting even speedier. It takes Amazon an average of 3.2 days to deliver a parcel after a shopper clicks "buy," per Rakuten Intelligence. For all other e-commerce companies, the average time is 6 days.
  • Amazon — which has started offering its shipping capabilities as a service — will be able to ship products for about two-thirds the rates of UPS and FedEx, Pellas projects. Its trucks and planes are out delivering Amazon packages anyway so it can offer shipping at cost, instead of collecting a margin.

"We're now talking about a retailer that will control the entire process" from manufacturing to delivery, says Mark Rosenbaum, a professor at the University of South Carolina.

But, but, but: While Amazon's suddenly large profile might look menacing, it won't necessarily move as it did in books to knock out its rivals, says Yossi Sheffi, director of MIT's Center for Transportation and Logistics. "They just want to take all the profitable routes and operations and leave the carriers with all the dogs.”

The bottom line: Amazon's march into shipping is the company's "classic model of partner with, copy, and unseat their competitors," says Jaimee Minney of Rakuten Intelligence.

  • Shipping partners have begun cutting ties with the e-commerce giant as it steps onto their turf. Earlier this month, FedEx chose not to renew its contract with Amazon for air shipments. Others could follow suit, experts say.
  • Like Amazon, Walmart also has a logistics business of its own and could emerge as a shipping competitor.

Go deeper: The race to own logistics

Go deeper

In photos: Protesters rally for George Floyd ahead of Derek Chauvin's trial

Chaz Neal, a Redwing community activist, outside the Minnesota Governor's residence during a protest in support of George Floyd in St.Paul, Minnesota, on March 6. Photo: Kerem Yucel/AFP via Getty Images

Dozens of protesters were rallying outside the Minnesota governor's mansion in St Paul Saturday, urging justice for George Floyd ahead of former Minneapolis police officer Derek Chauvin's trial over the 46-year-old's death.

The big picture: Chauvin faces charges for second-degree murder and manslaughter over Floyd's death last May, which ignited massive nationwide and global protests against racism and for police reform. His trial is due to start this Monday, with jury selection procedures.

Biden says $1,400 stimulus payments can start going out this month

Photo: Samuel Corum/Getty Images

President Biden said Saturday that the Senate passage of his $1.9 trillion COVID relief package means the $1,400 direct payments for most Americans can begin going out later this month.

Driving the news: The Senate voted 50-49 Saturday to approve the sweeping legislation. The House is expected to pass the Senate's version of the bill next week before it heads to Biden's desk for his signature.