Amazon is said to be testing a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses. This will certainly push the online retailer deeper into functions handled by longtime partners United Parcel Service Inc. and FedEx Corp.
According to Bloomberg, the delivery service began two years ago in India, and Amazon has been slowly marketing it to U.S. merchants in preparation for a national expansion. The service, named Seller Flex, began on a trial basis this year in West Coast states with a broader rollout planned in 2018.
With this new service, Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers’ homes. This was originally done by its delivery partners, UPS and FedEx.
Invariably 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.
The project underscores Amazon’s ambitions to expand its logistics operations and wean itself off the delivery networks of UPS and FedEx.
Amazon accounts for 5 percent to 10 percent of UPS revenue, according to analyst estimates, while FedEx has said the e-commerce giant accounts for less than 3 percent of its sales.
