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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

2 hours ago - Politics & Policy

Scoop: Beto plans Texas comeback in governor's race

Former U.S. Rep. Beto O'Rourke speaks during the Georgetown to Austin March for Democracy rally on July 31, 2021 in Austin, Texas. (Photo by Brandon Bell/Getty Images)

Former Rep. Beto O’Rourke is preparing to run for governor of Texas in 2022, with an announcement expected later this year, Texas political operatives tell Axios.

Why it matters: O'Rourke's entry would give Democrats a high-profile candidate with a national fundraising network to challenge Republican Gov. Greg Abbott — and give O’Rourke, a former three-term congressman from El Paso and 2020 presidential candidate and voting rights activist, a path to a political comeback.

Texas doctor says he performed an abortion in violation of state law

Pro-choice protesters march down Congress Avenue and back to the Texas state capitol in Austin, Tx in July 2021. Photo: Erich Schlegel/Getty Images

A Texas doctor disclosed in an op-ed in the Washington Post Saturday that he has performed an abortion in violation of the state's restrictive new abortion law, which bans effectively bans the procedure after six weeks.

Why it matters: Alan Braid's op-ed is a direct disclosure that will very likely result in legal action, thereby setting it up as a potential test case for how the abortion ban will be litigated, notes the New York Times.

Mike Allen, author of AM
3 hours ago - Technology

Axios interview: Facebook to try for more transparency

Nick Clegg last year. Photo: Matthew Sobocinski/USA Today via Reuters

Nick Clegg, Facebook's vice president of global affairs, tells me the company will try to provide more data to outside researchers to scrutinize the health of activity on Facebook and Instagram, following The Wall Street Journal's brutal look at internal documents.

Driving the news: Clegg didn't say that in his public response to the series. So I called him to push for what Facebook will actually do differently given the new dangers raised by The Journal.