Amazon Reportedly Expanding Its Shipping Service Plans

A UPS worker delivers packages

A UPS worker delivers packages

Through services like Amazon Flex, a pizza-delivery-meets-Uber-like shipping service, Amazon is already tackling home delivery in select markets. The online retailer would then either make deliveries directly to consumers' doorsteps or hand the packages off to UPS, FedEx, US Postal Service, or other carriers to make the "last-mile" delivery.

Starting small and only working with its own business customers fits with Amazon's usual approach of testing on itself and small groups of customers before expanding to larger markets.

A year ago it announced a $1.4 billion investment at the airport that's expected to be its primary air freight hub, leasing more than 900 acres for a facility that will eventually support more than 100 Amazon Air planes and employ more than 2,700 people.

UPS will continue to support Amazon and all other valued customers, said spokesperson Glenn Zaccara.

As Amazon begins to expand its shipping capabilities, the tech business also announced last week it would begin delivering some Whole Foods goods through the Amazon Prime Now service.

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UPS and FedEx declined to comment on Amazon's specific strategies or decisions regarding the utilization of their services.

Amazon's been pushing toward having more control over its logistics for a while now: they've purchased stakes in at least 2 shipping companies (Yodel, Colis Prive), have a fleet of almost 6k shipping trailers, and own an air freight subsidiary with 32 planes. Amazon has since become the sole owner of the French company.

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"We're always innovating and experimenting on behalf of customers and businesses that sell and grow on Amazon to create faster low-priced delivery choices", spokesperson Kristen Kish told the E-Commerce Times.

The push into delivery could also be a very long-term play against Amazon's biggest rival in online delivery, Walmart. The company's per package volume rose by about 4.5 percent to 5.08 billion.

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UPS does not reveal what percentage of its income comes from Amazon.

They can range from 10-20 percent of costs, depending on carriers, rate tables and product size, she told the E-Commerce Times.

"All I can add to that is to just say that Amazon is a long-standing customer of FedEx". "We can expect this initial rollout to serve as a basis for improving the offering, with Amazon taking an iterative approach as they reach new geographies".

An Amazon shipping service means third-party sellers on the marketplace will be even more beholden to the company's demands, policies and overall vision. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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