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            november 14, 2019

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Amazon tests delivery services in US pose threat to FedEx, UPS


Amazon.com is testing out a new delivery service that would make more products available for free two-day delivery and avoid logjams at its warehouses, according to two people familiar with the plan, reported Bloomberg.
The service commenced two years ago in India, and Amazon has been gradually marketing it to US merchants in readiness for a national expansion, said sources, who said it would go by the name of Seller Flex.
The service began on a trial basis this year in US west coast states with a broader rollout planned in 2018, the people said. Amazon declined to comment.
Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers' homes, the people said, who noted delivery of merchandise 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.
Handling more deliveries itself would give Amazon greater flexibility and control over the last mile to shoppers' doorsteps, let it save money through volume discounts and help avoid congestion in its own warehouses by keeping merchandise in the outside sellers' own facilities.
"Amazon's final-mile efforts reflect a logical extension of its model as it builds network density," said Benjamin Hartford analyst Robert Baird in a note.
"Amazon is a valued UPS customer," said UPS spokesman Steve Gaut. "We support all our customers with industry-leading e-commerce solutions and expect to expand these relationships further in the future."
FedEx refused to comment on Amazon's plans but pointed out the "scale, infrastructure and complexity" involved in running a global transport network. The company said it's innovating in ways related to new services for e-commerce residential deliveries, but noted that is "only one piece of the capabilities that we provide."
Last year, Amazon introduced Seller Fulfilled Prime, which lets merchants who don't stow items in Amazon warehouses still have their products listed with the Prime badge, meaning they'll be delivered within two days. The merchants had to demonstrate they could meet Amazon's delivery pledge, and many used UPS and FedEx for deliveries.
Amazon has started looking beyond its own warehouse network to give shoppers quick access to an abundant assortment of goods. Its Fulfilment by Amazon offering already lets merchants ship goods to Amazon warehouses around the US, where they can be stored, packed and shipped to customers. That centralised approach can create logjams, particularly during the busy holiday shopping season.

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