Amazon is Testing its Own Delivery Service to Rival FedEx and UPS

Depending on where you call home, you may have noticed Amazon’s fleet of plain white trucks delivering packages around town.  Amazon is experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses, which will push the online retailer deeper into functions handled by longtime partners UPS and FedEx.

Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers’ homes, cutting into the work that is now often handled by UPS and FedEx. Amazon could still use these couriers for delivery, but the company will decide how a package is sent instead of leaving it up to the seller.

The project underscores Amazon’s ambitions to expand its logistics operations and wean itself off the delivery networks of UPS and FedEx. A rush of last-minute holiday orders in 2013 forced Amazon to issue refunds to shoppers who didn’t get gifts in time, highlighting the perils of being overly dependent on partners for an integral component of its business pledge — quick, reliable delivery. Taking over some responsibility for delivery enables Amazon to protect that edge as rivals like Wal-Mart Stores Inc. enhance their own delivery operations.

Amazon’s latest move should not surprise many, as the company has demonstrated its ability to disrupt industries time and time again.

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