Amazon.com announced expanded logistics offerings that will turning it into a major competitor for parcel carriers, air freight companies and also impact truckers and third-party brokers.
Shares of FedEx fell 9% to mark their worst day in more than a year, UPS fell over 10%. Shares of GXO Logistics fell 18%, while Forward Air Corp. declined by over 24%. Trucking companies like Old Dominion Freight Line, declined by over 7%.
The company’s unit “Amazon Supply Chain Services” will allow companies across industries to use Amazon’s supply chain and logistics to move produces and raw materials. It will have a fleet of more than 100 cargo planes and a big network of warehouses.
According to Amazon, major retailers including Procter & Gamble, 3M, Lands’ End and American Eagle Outfitters have already signed up for this new program.
The announcement “could be a watershed moment for North American freight transportation companies,” Morgan Stanley analyst Ravi Shanker wrote in a note to clients on Monday. Air freight companies and parcel carriers are likely to take the hardest hit, while truckers, railroads, ocean shippers and warehouse operators are also at risk, he added.
Last year, Amazon delivered more than a quarter of the 23.9 billion parcels shipped in the US, while FedEx and UPS combined moved around a third, according to industry data provider ShipMatrix.
Shares of Amazon ended 1.4% higher on Monday. The stock has risen 28% in the last one month.
(With Inputs From Agencies)
