From The Wall Street Journal:
Amazon.com Inc. is preparing to launch a delivery service for businesses, positioning it to directly compete with United Parcel Service Inc. and FedEx Corp.
Dubbed “Shipping with Amazon,” or SWA, the new service will entail the tech giant picking up packages from businesses and shipping them to consumers, according to people familiar with the matter.
Amazon expects to roll out the new delivery service in Los Angeles in coming weeks with third-party merchants that sell goods via its website, according to the people. Amazon then aims to expand the service to more cities as soon as this year, some of the people say.
While the program is being piloted with the company’s third-party sellers, it is envisioned to eventually be opened to other businesses too, according to some of the people. Amazon is planning to undercut UPS and FedEx on pricing, although the exact rate structure is still unclear, these people said.
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It is the latest move by Amazon to create its own freight and parcel delivery network. In the last couple of years, Amazon has expanded into ocean freight, built a network of its own drivers who can now deliver inside homes and leased up to 40 aircraft while establishing an air cargo hub.
Amazon already delivers some of its own orders in at least 37 U.S. cities. With the new “Shipping with Amazon” option, Amazon plans to send drivers to pick up shipments from warehouses and businesses itself and deliver the packages when it is able, the people said. For shipments outside Amazon’s delivery reach, the U.S. Postal Service and other carriers will take care of the so-called last mile to customers’ doorsteps.
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Amazon started building out its logistics network in earnest after it missed deliveries during the all-important holiday season in December 2013, according to people familiar with Amazon’s thinking. As more shoppers bought products online, Amazon executives concluded that the rate of parcel growth was too large for existing carriers to handle. Amazon also wanted to offer two-day deliveries, seven days a week.
Link to the rest at The Wall Street Journal