Alexa, Ship My Purchase
Amazon is testing its own delivery service. If it succeeds, expect a price war.
Last week rumors started to circulate about Amazon’s plan to create a self-owned shipping system similar to UPS and Fedex.
This could easily disrupt the entire US shipping industry given the volume Amazon currently delivers.
To give you an idea of the capacity we’re talking, in 2017 Amazon accounted 10% of UPS’s entire shipping total. According to the attached USA Today link, over the next few months Amazon will begin truck shipping individual orders from their existing distribution centers in higher volume markets like LA.
Assuming that goes well expect them to spider-web shipping capabilities out across the country. If Amazon gets this right they could achieve the ultimate example of Industry Verticalization by self-owning other links in their own supply chain.
If you’ve seen Fedex/UPS’s financials lately you’ll understand how lucrative this business can be. And it feels like Mr. Bezos and team are looking to take a bite out of this low hanging fruit.