Challenging UPS and FedEx, Amazon Opens Its Shipping Network to All Businesses

This week Amazon opened up its parcel shipping, fulfillment, and distribution “to businesses of all types and sizes.” Any business can now ship, store, and deliver “using the same supply chain that supports Amazon,” according to Monday’s announcement of “Amazon Supply Chain Services.”

The move sent shares of UPS and FedEx “tumbling” Monday writes GeekWire. And though both stocks bounced back as the week went on, GeekWire sees this as the latest example of Amazon “turning its internal capabilities into products and services for sale…”

“Amazon had already surpassed both carriers to become the nation’s largest parcel shipper by volume, according to parcel-analytics firm ShipMatrix.”

Initial customers include Procter & Gamble, which is using Amazon’s freight network to transport raw materials; 3M, which is using it to move products to distribution centers; Lands’ End, which is fulfilling orders across sales channels from Amazon’s warehouses; and American Eagle Outfitters, which is using Amazon’s parcel service for last-mile delivery. The service can fulfill orders placed through platforms that compete with Amazon’s own marketplace, including Walmart, Shopify, TikTok, and others… Peter Larsen, vice president of Amazon Supply Chain Services, compared the launch to the origins of Amazon’s cloud business…

In addition to putting Amazon in competition with existing players in the logistics industry, the move also raises questions about data privacy. Amazon has faced accusations of using nonpublic seller data to compete against merchants on its marketplace, which it has denied. Larsen told the Wall Street Journal that the company prohibits using supply chain customer data for its own marketplace decisions, noting that hundreds of thousands of Amazon sellers already trust the company to fulfill orders placed on rival platforms.

The article notes taht in his annual shareholder letter Amazon’s CEO “said the company is also exploring selling its custom AI chips and robotics to outside customers.”