Originally published as a Thought Bubble newsletter on April 17.
Amazon's less-than-truckload (LTL) service, which the company touted this month, reignited previous rumors that the e-commerce giant might buy a trucking company.
Why it matters: An Amazon acquisition would rock the industry by reshuffling retail volumes that have helped sustain carriers amid stagnant industrial demand.
Be smart: The inbound-only service has been around since 2019, and the announcement doesn't necessarily mean Amazon is eyeing a deal.
What they're saying: Satish Jindel, a FedEx alum and president of SJ Consulting Group, doesn't foresee Amazon becoming a full-fledged LTL carrier in the next few years.
- Putting a few pallets on inbound trailers doesn't mean Amazon is getting into for-hire LTL — much less planning to acquire FedEx Freight or one of its competitors, Jindel tells Axios.
- If Amazon were looking for a new profit center, RateHero CEO Curtis Garrett tells Axios, "it would make more sense to buy a large brokerage" than an asset-based carrier.
- An Amazon spokesperson declined to comment.
State of play: Knight-Swift Transportation Holdings, the largest U.S. truckload carrier, is building out its own national LTL network, largely via acquisitions of other trucking firms.
- Plus, both a FedEx Freight spinoff and a major TFI International deal loom, while Yellow Corp.'s 2023 bankruptcy led to divestitures.
Reality check: Amazon didn't bid on assets during Yellow's bankruptcy auction, and acquiring a carrier runs the risk of tangling with the Teamsters.
How it works: Amazon's inbound shipping service offers customers shared space on tractor-trailers headed to its facilities, which could help the company fill trucks returning from outbound truckload runs.
- Amazon boasts 60,000 trailers and facilities across the country. But inbound shipments are "a drop in the bucket" for the volumes it would need to compete as a national LTL carrier, Garrett tells Axios.
