Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Photo: Smith Collection/Gado/Getty

Amazon appears to be lowballing rivals in a classic squeeze to take over yet another industry: freight.

Why it matters: With its track record of upending nearly every business it enters, Amazon has the potential to decimate UPS and FedEx as it moves into shipping. Its tactic is a modern example of putting competition through a Rockefeller-style "good sweating."

"Amazon is turning areas of the business that were historically costs into new revenue streams," says Gartner L2 analyst Griffin Carlborg. Shipping could be a massive source of profit for the tech giant — U.S. companies spent $1.5 trillion on moving goods in 2017, reports WSJ.

  • Amazon's online trucking platform is already undercutting the big players' average shipping rates by up to 33%, reports FreightWaves.
  • The behemoth can also scoop up customers with its top trust rating. Raymond Neal, an independent bookstore owner who sells on Amazon, tells me, "People pay more for the same book if it's 'Fulfilled by Amazon,' or Prime."
  • Logistics incumbents should worry, Carlborg says. "[Amazon is] breaking into new industries by offering services that are too good to be true or prices that are too good to be true, and figuring out opportunities to monetize it later."

Analysts say it’s a familiar strategy. Amazon has tried to grab customers from sellers on its site by debuting cheaper, private label products right alongside the existing selection.

The company denies the lowballing: "We work with many line-haul service providers in our transportation network and have long utilized them to carry loads for Amazon. This service, intended to better utilize our freight network, has been around in various forms for quite some time. The analysis suggesting dramatic undercutting of pricing is false."

The big picture: As we noted when Amazon announced 1-day shipping, one way the company can slash delivery times for Prime is by building its own logistics network — chipping away at its reliance on the big shippers.

Axios emailed UPS and FedEx. The companies did not immediately return requests for comment.

Go deeper

Georgia governor declines Trump's request to help overturn election result

Georgia Gov. Brian Kemp. Photo: Elijah Nouvelage/Getty Images

Georgia Gov. Brian Kemp pushed back on Saturday after President Trump pressed him to help overturn the state's election results.

Driving the news: Trump asked the Republican governor over the phone Saturday to call a special legislative session aimed at overturning the presidential election results in Georgia, per the Washington Post. Kemp refused.

Philanthropy Deep Dive

Illustration: Aïda Amer/Axios

A look at how philanthropy is evolving (and why Dolly Parton deserves a Medal of Freedom).