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September 29, 2016 12:00 am

Amazon Looking To Abandon UPS, FedEx In Favor of Its Own Delivery Service

An anonymous reader quotes a report from Ars Technica: A report by The Wall Street Journal claims that Amazon is building its own shipping service to replace FedEx and UPS, giving it more control over its packages and possibly allowing it to ship packages from other retailers. Amazon has said its own delivery services would be meant to increase its capacity during busier times of the year, like the upcoming holiday season. However, "current and former Amazon managers and business partners" claim that the company's plans are bigger than that. The initiative dubbed "Consume the City" will eventually let Amazon "haul and deliver" its own packages and those of other retailers and consumers. That delivery network would also directly compete with the likes of UPS and FedEx. It makes sense that Amazon would want to sell, ship, and deliver orders on its own. The report estimates that the company spent $11.5 billion on shipping just last year, amounting to 10.8 percent of sales. The shipping process is currently a bit convoluted: packages from Amazon warehouses get sent to one of two shipping routes, either FedEx or UPS, or to a sorting facility that lumps all packages with similar zip codes together. FedEx and UPS handle its shipments and deliver them to customers, while the packages at the sorting facilities either get delivered via USPS or by Amazon employees themselves. If Amazon were to have control over its shipments over longer distances, it's estimated that the company could save about $3 per package -- about $1.1 billion annually.

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