“Shipping With Amazon” May Mean Big Problems for Shipping Firms

February 14, 2018         By: Steven Anderson

While Amazon has been bullish on delivering its own products for some time—these are the folks who pretty much put “drone delivery” into the world’s lexicon—it hasn’t really made a lot of progress into that last mile between people making and paying for their orders, mobile or otherwise, and delivering them. No, it’s always counted on subcontractors for that, at least, until now. Now, the Shipping With Amazon service—a recent creation of Amazon’s—will pick up packages from businesses and deliver said packages to customers, without a stop at Fed Ex or UPS.

To the undoubted relief of both major shippers, Amazon’s plan is limited to start with. It will only be offering the service in Los Angeles, reports note, for third-party sellers. Eventually, the program will expand to other locations. The concept has been in development, reports suggest, for the last two years with starts in India and on the US west coast.

In perhaps the greatest blow, shipping is expected to cost less than it would with either of the other two majors. Response was, at best, muted: UPS noted that it continues to support Amazon among its many clients, and Fed Ex largely clammed up.

Amazon working on its own delivery options has been a big thing for some time now. We’ve already noted the drone delivery concept, which is still, at last report, blockaded at the federal government level. It’s even taken out new drone delivery patents as recently as a week ago. The purchase of Whole Foods only made this concept more vital to Amazon’s overall futures going forward.

With this, Amazon may well have not only dropped the other shoe on its Whole Foods purchase, but also on its massive volume of other sales as well. Amazon is a concept tailor made for not only mobile shopping but also mobile payments, and by being able to deliver its own goods as well, it’s turned itself into a complete closed-loop corporate ecosystem.

Amazon may well be setting itself up to be a perfectly internal system, especially since it’s got its own payment processor in Amazon Pay. It may not go that far, but it’s poised to own the last mile and a few in between as well.