Amazon jumps in the ring to take on UPS and FedEx delivery

Inc. may have ambitions to compete against FedEx Corp. and the United Parcel Service Inc. with its own shipping business.

Amazon, it seems, wants to enter every possible business segment it can to add more and more revenue streams to its growing empire.

Participants in FBA Onsite then gain access to Amazon's negotiated shipping rates without having to ship inventory to Amazon's warehouses, as was previously the case.

"There is tremendous opportunity in the business-to-customer market (i.e. Walmart to household deliveries) and more growth coming to the sector and UPS, irrespective of how other companies shift strategies", UPS spokesman Glenn Zaccara said.

As independent analyst Ben Thompson put it, Amazon's ultimate goal "is to take a cut of all economic activity". However, the company is reportedly going to start with shipping goods from businesses that sell products on its website.

After sending shock waves through the grocery and health-care industries in recent weeks, Amazon dropped another bombshell Friday: The online giant plans to test a new delivery service for businesses beginning this fall, in hopes of speeding up the fulfilment process for third-party items, according to a source familiar with the matter.

We could also see SWA expand to other cities across the USA later on this year, so Amazon is definitely looking to hit the ground running with this.

Analysts estimate that UPS gets up to 6 percent of revenue from Amazon deliveries compared to about 3 percent for FedEx.

"We think the current economic expansion and surging e-commerce volumes are able to support a new competitor", the analyst said, according to The Los Angeles Times.

The threat of Amazon building is own delivery service has percolated since at least 2014, after a troublesome 2013 holiday delivery season plagued by delays of UPS and FedEx shipments due to an overload of packages. The hedge fund run by Robert Bishop held 159,764 shares of the air freight and delivery services company at the end of 2017Q3, valued at $36.04 million, down from 193,791 at the end of the previous reported quarter.

Shipping costs, which include sortation and delivery center and transportation costs, were $11.5 billion, $16.2 billion, and $21.7 billion in 2015, 2016, and 2017. Bank of America reiterated a "buy" rating and issued a $315.00 price target on shares of FedEx in a research note on Friday, January 12th.

Although Amazon already sends some of its orders in nearly 40 cities in US, it is to be seen wher company is ready to face each or with established firms, such as FedEx and UPS.