How Amazon Is Now Threatening FedEx and UPS

By Chris Lange Updated Jan 12, 7:29AM EST · Published Oct 5, 10:55AM EDT

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How Amazon Is Now Threatening FedEx and UPS — © Thinkstock

Amazon.com Inc. (NASDAQ: AMZN) shares saw a nice bump on Thursday on reports that it is experimenting with its own delivery service. This is not good news for the likes of FedEx Corp. (NYSE: FDX) and United Parcel Service Inc. (NYSE: UPS). It seems that Amazon has found another industry to terrorize, and even though the drop seen at FedEx and UPS might appear to be marginal, it could hurt if Amazon can get its delivery service off the ground.

Considering the current trends of ever more companies expanding their omnichannel and e-commerce operations, who delivers the goods makes a nice chunk of change. If Amazon keeps expanding its e-commerce empire, saving on these deliveries could help out its bottom line, but in turn shave off some business from UPS and FedEx.

The goal of Amazon’s delivery service is to help expand the items available for its free two-day shipping and reduce overcrowding in company warehouses. Also handling its own deliveries would allow Amazon greater flexibility and ultimately let it save money.

Over the past two years, Amazon has been testing this service in India while slowly marketing it to U.S. merchants. According to sources close to the matter, Amazon is calling the project “Seller Flex.” This service began on a trial basis on the West Coast earlier this year, expanding further in 2018.

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Shares of Amazon were last seen up 0.8% at $972.78, with a consensus analyst price target of $1,153.60 and a 52-week trading range of $710.10 to $1,083.31.

FedEx shares were up 0.9% at $220.27. The stock has a 52-week range of $168.00 to $227.00 and a consensus price target of $232.35.

UPS traded down 0.6% at $117.19, within a 52-week range of $102.12 to $120.80 and with a consensus price target of $115.68.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.