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Amazon to start delivering goods itself this year, claims report

13 Feb 2018, 15:49 ... ims-report

Amazon will take on global giants in the cut-throat, low-margin delivery business

Amazon is planning to test a delivery service this year that will see it ship its own and its sellers' goods directly. The move will pit the company against delivery giants, such as UPS and FedEx, as well as the likes of the Royal Mail and Yodel in a business that subsists on the slimmest of margins.

According to an unnamed source quoted by Reuters, Amazon has just started running its "Shipping with Amazon" service in Los Angeles amid reports that trials are already under way in London.

The new scheme is thought to be due for a full launch later this year.

Under "Shipping with Amazon", the company will send a lorry to pick up sellers' packages, and take them either directly to an Amazon fulfilment centre, or to postal services or couriers depending on what's most cost-effective, according to the Reuters source.

Amazon's plan demonstrates a lack of basic understanding of the full scale of the global transportation industry
Considering Amazon's size, scale and reach, such a delivery service could encroach on the businesses of established courier companies. Indeed, the rumours about "Shipping with Amazon" sent shares in UPS and FedEx tumbling on Friday.

However, if Amazon believes it can take a large chunk of their business it is mistaken, said FedEx spokesman Patrick Fitzgerald. Amazon's plan "demonstrates a lack of basic understanding of the full scale of the global transportation industry," he said.

"There is tremendous opportunity in the business-to-customer market and more growth coming to the sector and UPS, irrespective of how other companies shift strategies," said Glenn Zaccara, a spokesman for UPS.

While it has not yet commented on the reports this would not be the first time Amazon has tried to change the way goods are delivered. Ongoing plans include the use of drones and self-driving cars. Drones have already been tested in the skies of the UK and have the potential to be much faster and cleaner than the current use of trucks, especially in cities, according to Amazon.

In 2016, the UK government gave permission to Amazon for the testing of drones, covering deliveries in rural and suburban areas. That approval followed similar permissions by the US Federal Aviation Authority.

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