Amazon plans move into US delivery business

United Parcel Service (UPS) and FedEx saw their share prices slip in trading after a report that Amazon is preparing to start a delivery service called Shipping with Amazon for businesses. This would see the company compete directly with the largest shipping companies in the US.

The move to pick up parcels from businesses selling on Amazon.com and delivering them to customers, reported by the Wall Street Journal, would be the latest effort by the online retailer to expand the number of shipments it handles from online purchases.

Greater control

Gaining a greater share of that business, now largely handled by FedEx and UPS, would give Amazon greater control over the timing and cost of deliveries to shoppers' homes. The retailer expects to roll out the new delivery service in Los Angeles in coming weeks, the Journal said.

There is “tremendous opportunity” in the shipment of goods from businesses to consumers and “more growth coming to the sector and UPS, irrespective of how other companies shift strategies,” said Steve Gaut, a UPS spokesman. He declined to comment on Amazon’s strategy.