Amazon is launching a package-delivery service to compete with FedEx and UPS

Getty ImagesA worker in an Amazon warehouse.
  • Amazon will launch a package-delivery service called Shipping with Amazon, or SWA, The Wall Street Journal reported.
  • The service is designed to compete directly with UPS and FedEx.
  • SWA is expected to roll out in Los Angeles over the next few weeks, then spread to other cities in the US during the year.

Amazon is planning to debut a package-delivery service for businesses that’s designed to compete directly with FedEx and UPS, according to a new report.

The Wall Street Journal’s Laura Stevens reported Friday that the e-commerce giant would roll out the service, called Shipping with Amazon, or SWA, in Los Angeles over the next few weeks. The service is expected to then spread to other cities around the US during the year.

The company would send SWA drivers directly to retailers and warehouses to pick up parcels, cutting out other delivery services. Amazon would then take the packages directly to consumers in the 37 cities where it currently delivers, according to the report.

The plan is to start with registered third-party Amazon vendors to undercut the costs of the other delivery giants.

The move expands Amazon’s recent push into logistics and delivery, following the company’s leasing of aircraft and ocean freight equipment.

The company has also been pushing into new avenues of business, including the acquisition of the grocery chain Whole Foods last summer and a recently announced joint healthcare venture with JPMorgan and Berkshire Hathaway.

In response to the news, UPS’s stock declined about 6.5% in premarket trading, while FedEx’s stock fell by just over 5%. Amazon shares were little changed.

Read the full report at The Wall Street Journal ยป

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