Amazon just opened its logistics empire to the world — and FedEx and UPS are already bleeding market share.
In May, Amazon launched Amazon Supply Chain Services, throwing its trucks, planes, and warehouses open to any business, not just its own marketplace sellers. The move sent UPS and FedEx stocks tumbling roughly 10% on announcement day alone. Two months later, the wounds are deepening.
What’s driving the switch?
- Amazon is offering rates competitive with — or cheaper than — FedEx and UPS, according to shipping contract experts
- Clients who switched saved an average of $6 per package, per logistics data platform Loop
- One client saw 33%+ annual savings while Amazon covered 90% of their distribution needs
- Amazon is waiving surcharge fees and ditching complex pricing schemes to win over converts
- Big names already on board: Procter & Gamble, 3M, and American Eagle Outfitters
Zeroing in on USPS too. Amazon isn’t stopping at the big two. It’s quietly eyeing sub-one-pound packages — territory long owned by the postal service — and already cut the number of parcels it routes through USPS by 20% in March.
Not a perfect fit for everyone. Amazon’s current offer tops out at two-to-five-day ground shipping across the contiguous US. If you need overnight delivery, or you’re shipping medical supplies with complex compliance requirements, FedEx and UPS still have the edge. As one logistics CEO put it: the legacy carriers are quietly retreating to the premium lane — express shipments, healthcare logistics, the stuff people pay a premium for.
Looking ahead… Amazon has the infrastructure, the pricing muscle, and — let’s be honest — the patience to play a long game. FedEx and UPS will need to decide whether to compete on price or double down on specialisation. For now, the parcel wars are just getting started.